Two-Factor Authentication (2FA) is Important to Protect Your Cryptocurrency Investments. Here’s Why.

The advent of the internet has brought about the possibility of so many things that were impossible prior to its inception. However, even with these advantages, technological advancement is accompanied by many disadvantages, chief among them being the ability to hack and access the online accounts of people without their consent.

Hacking activities are growing more rampant by the day, thereby creating a need to find a more secure way for individuals to protect their accounts from online thieves. Many individuals have taken to the internet and other platforms to complain bitterly of how their web and bank accounts were hacked even with their strong password combination.

Two-factor authentication may be the answer for those wishing to protect themselves. It’s possible you’re reading this post because you’ve been a victim of hacking or are looking for a way to prevent such activities. There’s no need to worry as I intend to explain why the annoying but necessary two-factor authentication will be instrumental in securing your cryptocurrency investments against would-be hackers attempting to steal what is yours.

What is Two-Factor Authentication?

Two-factor is any system that creates additional security for an online account. It allows an extra layer of protection that requires a confirmation before accessing an account.

The function is to create a two-step verification process, thus making your account more secure and making would-be hackers crack two systems in order to steal any money or information. Basically, the theory of two-factor authentication involves using three different factors to ensure that the access to your account is not unauthorized. These factors are what you have, what you know and what you are.

The first factor includes things in your possession such as your phone or other devices to receive codes and confirmation request. The second includes something in your knowledge such as passwords and usernames, and the third includes your eye, fingerprints or even facial recognition.

This is in addition to the traditional username name and password which are both referred to as single-factor authentication.

Due to the rapid growth and frequency of hacking activities with single-factor authentication, developers resorted to adding another means of confirmation to many sites and platforms to ensure that the account can only be accessed by those who are authorized to do so. It’s not just cryptocurrency exchanges, but many platforms and websites have also been victims of these awful activities. Some well-known ones include the iCloud celebrity photo leak, DropBox’s password security breach, and the hack in the United States Postal Service.

It’s believed that hackers make use of systems that allow them to try thousands of possible usernames and passwords on your account within a few minutes. Two-factor authentication requires its users to link their mobile numbers or any other secured device where confirmation will be sent to when someone tries to access your account. This invariably means that for anybody to access your online account, he/she will need to know the details of your single-factor authenticator as well as have access to your phone in order to obtain your second-factor authentication.

Although two-factor authentication is not a guarantee that your account is protected from hacking activities, it defends it far better compared to single-factor authentication.

Challenges of Using Two-Factor Authentication

So many people use just a username and password, otherwise known as the knowledge factor authentication, to access their online and bank accounts. This is not a bad idea, but two-factor authentication is superior as it adds another layer of security to your account.

When two-factor authentication is activated, it automatically sends a code to your mobile phone or other devices in your possession. It may sound stressful or complicated to individuals who have yet to adopt it, but it’s important to note that its benefits outweigh the stress that accompanies it, especially when dealing with Bitcoin and other crypto assets.

One of the challenges most people face with two-factor authentication is that it takes additional time to access your account compared to the traditional password system. Many users are also worried about what will happen to their online accounts if they lose their phones. This may be tricky, and you may have to wait longer to retrieve access to your account.

This is why many websites request users to provide additional details such as an email address or the email address of friends and family. Details of retrieving your account will be sent to the email you provided when setting up the two-factor authentication, after which you can change or disable the two-factor authenticator.

Another setback of the security system is that it may be impossible to access your account when there’s an emergency and you have no access to your phone.

What If an Exchange Does Not Offer Two-Factor Authentication?

Most cryptocurrency exchanges now offer their users an option to enable two-factor authentication; if they don’t, it would be highly recommended to find a different exchange or immediately transfer any coins out of the exchange after purchase.

A website created by Josh Davis called TwoFactorAuth.org provides visitors with lists of websites that use two-factor authentication and what type of two-factor authentication they provide. Before signing up to a new cryptocurrency exchange, it would be a good idea to check the list to ensure your money is going to be secure.

How to Enable Two-Factor Authentication

In addition to cryptocurrency exchanges, many other websites, platforms, financial sites, and banks now have a provision for two-factor authentication. All you have to do is activate it for your account and the service will be available the next time you try to log in. Two-factor authentication should also be enabled for emails as most of your accounts can be accessed through email.

You should consider browsing through the FAQ of the website or go to “Settings” tab. After which you should check your “account,” “privacy,” or “security” tab for an option to activate the two-factor authentication.

There are several other ways to protect your online accounts from hacking activities, but the importance of two-factor authentication cannot be overemphasized. Furthermore, even with two-factor authentication, it’s important to use hard-to-guess usernames coupled with strong password combinations for maximum security.

There would be nothing worse than to implement the right cryptocurrency trading strategy only to have the funds stolen in the end.

Related: The $2 Million Ian Balina Hack: 4 Key Security Takeaways & Reminders

1 Comment

  • Nate
    Posted May 31, 2018 12:48 pm 0Likes

    Two-factor authentication is a true pain in the butt. However, it is absolutely necessary evil we must deal with if you want to be able to sleep at night.

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