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.
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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, usually goes well, but when something bad happens, it becomes catastrophic.
One of the best ways to protect yourself, your wallet, and your investments is to use Two-Factor Authentication (2FA or TFA).
What is Two-Factor Authentication?
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 that only the real user could possibly have.
This could be any of three things:
- At the simplest level, 2FA, may just be a second password, an extra PIN, or a security code answer that only you would know.
- A little harder would be something you physically or digitally own, or will own in the future, such as a physical pin generator (used by a few banks) or an online pass code generated at the time of logging in.
- The best 2FA layer (in theory) is yourself, your fingerprint, eye pattern, voice, or facial I.D, in other words, your bio-metrics can be used in tandem with today’s technologies.
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 or place your fingerprint on your device’s sensor.
Why You Should Use Two-Factor Authentication
Additional Security with Ease
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, 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.
Identity Theft Prevention
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 16 billion dollars stolen via Identity theft alone.
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:
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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.