What is Two-Factor Authentication (2FA or TFA)? How does it work? The complete guide to securing your privacy using two-factor authentication.
s your wallet secure? Not the one in your pocket or purse, but the digital one you have all your irreplaceable bitcoins and cryptocurrencies in. Many security breaches have happened recently, including the reported $40 million dollars stolen in BTC from Binance’s hot wallet and Bithumb's $13 million EOS hack.
According to Chainalysis, in 2017 cyber criminals had stolen over 200 Million dollars worth of Ethereum with simple measures like phishing scams, essentially a fake site that mirrors the real one and asks for your password.
We live in a time where we spend most of our lives in front of screens; and laptops, tablets, and mobile devices are a breeding ground for cyber criminals. Cyber crimes come in all different shapes and sizes including hacking, fraud, identity theft, computer viruses, DDoS attacks and more. Attacks can happen to anyone ranging from individuals to huge corporations and government bodies.
Ideally, we would like to trade freely knowing that we all have our best interests at heart, and no one would ever violate our security, but that is obviously not the reality. The biggest threat to cryptocurrency is cyber crime, and despite this, many of us still keep funds on crypto exchanges. For the most part, things usually goes well, but when something bad happens, it becomes catastrophic.
There are many options to keeping your cryptocurrency safe. This can mean getting a hardware wallet, offline wallet, using a secure WiFi connection, keeping your devices clean, and more.
One of the best ways to protect yourself, your wallet, and your investments is to use Two-Factor Authentication (2FA or TFA).
Two-Factor Authentication is exactly what it sounds like, it simply adds another layer of security to your wallet and/or trading account.
2FA ensures that even if a cyber criminal can access your account with a stolen password, they would need one more thing or an identifier that only the real user could possibly have.
This could be any of three things:
So essentially as long as there are two-factors, or two “keys” required to access the property in question then it is considered to be 2FA. A real-life example is the bank card you use daily. Your card is the first key to accessing your bank account, but the PIN is the added layer of security that prevents anyone from stealing your card and easily accessing your account.
In the digital space, and specifically the mobile space, 2FA is usually the use of a password you remember with a USER I.D, then the second layer of security is usually the request for you to scan your face for facial recognition or place your fingerprint on your device’s sensor.
Hardware tokens are the first type of 2FA. These are physical devices that can look like little key fobs or a small USB. They usually self generate a pass code at set time intervals. The password generated by this device are time synchronized with the authentication server. This is mostly used by banks for customers accessing their online banking. HSBC gives hardware tokens to their customers to secure and authorize transactions.
There are also hardware tokens were they need to be physically connected to the computer at the time of authentication.
Hardware tokens are simple to use, but can become costly when issuing to mass quantities.
The new and improved version of the hardware token. Software tokens uses a software-generated time-based, one-time pass code.
To use a software token, users must download the application on their computer or mobile device. The app can be used with any website that supports 2FA. To use, the user signs in with user and password as usual, then enter the code shown on the 2FA app to gain access to their account.
This is the most popular choice as it is the very time efficient. Authy is good choice for users as it is free to use and supports multiple devices. This can also work online and offline.
Push notifications skips the middle man like hardware and software tokens. By eliminating this step, it reduces the risk phishing scams. Push notifications is when the website sends the user a direct notifications to authenticate an action. The user can then choose to click accept or deny access.
This is very simple to use, very secure, and provides the best user experience.
The downside to this is that push notifications only works with internet-connected devices.
SMS 2FA is when a user receives a text message with a one time pass code directly to their phone after submitting their user and password on a website. They then need to use the pass code they received to be granted access to their account.
They can choose to receive their pass code "voice-based." Meaning, instead of receiving a text, they receive a call and the other end will read out an automated one time pass code.
SMS is seen to be one of the less secure ways to authenticate users, as many websites store your personal phone number.
Bio-Metrics is the newest form of 2FA. Users can use their finger prints, iris scans, voice recognition, and even pulse to authenticate themselves. New ways to using bio-metrics are being explored everyday.
This technology is still considered to be in their infant stages of development but so far, it seems very promising.
Your wallet and trading account will have 2FA features. In most cases, thanks to mathematics and quantum computing, finding a password, or attempting to hack with a list of possible passwords can take years.
Even if the hacker could possibly obtain your password with other means such as the earlier mentioned phishing scam, they would unlikely have your email, phone number, PIN generated code, or your fingerprint to gain full access to your account. The best part is that it costs you virtually no extra time for the amount of additional security you get.
When using 2FA, if one password, generated PIN, or bio-metric scan doesn't match, then access to the account cannot be granted. In other words, if you are the unlucky winner of a cyber crime and got hacked, without your second password or bio-metrics, they cannot get access to your account or funds online.
It shouldn’t need to be told here that identity theft is a big threat to the crypto space. Not withstanding the digital currency market, in 2018 alone, 60 million Americans were affected by Identity Fraud, with over $107 billion stolen in total in the past 6 years.
The biggest danger is once access to your cryptocurrency account is granted, all your linked financial accounts are vulnerable, including your personal information. I.D theft can potentially ruin your financial life and impair your ability to gain credit and make major purchases in life. It can take decades to recover from the economic damage.
Keep in mind many exchanges and blockchain services now offer 2FA and some services to do not make it optional, for the ones that are not forced, there are guides all over the net for setting it up.
Look at the video below for a guide of setting up 2FA for Binance:
Hopefully, you are no longer on the fence about 2FA and if you really should get it, if you take anything from this article, it’s that 2FA is not an option, it is a must today in a world where I.D fraud and cyber threats are evolving daily.
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