If you use bitcoin exchanges, two-factor authentication is a must to secure your account and holdings. This is mostly because, in contrast to bank accounts, cryptocurrency has no fraud protection or mechanism for recovering lost money in the event of hacking.

You need to safeguard your account yourself, which is why two-factor authentication is essential. Although learning about and configuring two-factor authentication can be a little challenging, the additional security measure is definitely worth it. An easy walkthrough of the two-factor in-depth is given below.

The Importance Two-Factor Authentication (2FA)

To put it simply, 2FA is an additional security layer that incorporates a special code produced on an application on your cell phone or another gadget. You use this code to connect into services you have enabled two-factor authentication on. This implies that in order to log in to profiles where you have enabled 2FA, you will want both the 2FA code and your login information.

Beyond merely adding another password-like access requirement, 2FA increases security because the verification code is produced randomly, unique to each account, and often stored only on the device that the two-factor application is installed on. Therefore, the most recent version of the password for that particular account is required in order to access it.

Consequently, in order for a hacker to access your account, they would need to obtain both your login credentials and the most recent version of your code from your actual device. When using cryptocurrency trading platforms or wallet solutions, two-factor authentication is crucial because, in most circumstances, stolen cryptocurrency cannot be recovered.

Tips to Practice 2FA Effectively on Crypto Exchanges

To use two-factor authentication to its fullest potential, consider following the tips mentioned below:

• When you activate two-factor authentication, you will receive backup codes. Keep them safe and confidential. This also applies to the private keys and QR codes you receive when you enable 2FA on your crypto accounts. It basically works the same way as a private key for your digital currency wallet. In other words, you should never reveal your codes and should always store them offline and in a secure location.
• Keep your private keys safe and take screenshots of your QR codes. The QR code you used to create an account can always be scanned from a different device if you snap a screenshot of it. In the future, this could spare you a ton of time when switching between devices or setting up several devices.
• Use separate emails for your digital currency exchange and 2FA in case one of them is compromised. Also, make every effort to secure a user account that uses two-factor authentication.
• 2FA makes use of private keys, just like cryptocurrencies. You are entering a private key as you scan a QR code to activate 2FA.
• Considering phone-based authentication is still vulnerable to sim swap assaults, it is usually recommended that you use a 2-factor software instead of phone-based authentication.
• There is no perfect security solution. For instance, even that second layer won’t be sufficient if someone manages to obtain access to your cell phone and your personal data. The bottom line is that while two-factor authentication makes an account far more secure, no security measure is flawless.

Why should you Implement 2FA on your Crypto Wallet?

The need for better security measures has increased along with the use of cryptocurrencies. Online and offline e-wallets have also grown in popularity as targets for cybercriminals trying to take advantage of security holes and steal cryptocurrency holdings.

If enough safety precautions were not put in place, these hackers would succeed, and anyone may fall victim to malware, phishing scams, or hacking, which would cause significant financial losses. However before your digital wallet gets attacked and your assets are taken, two-factor authentication procedures can help you block out an intruder and get access restored.

To enable two-factor authentication, all you need to do is get an email or SMS requesting you to confirm the attempt using your cryptocurrency wallet. Other, more advanced protocols, some of which are listed below, can be employed in different circumstances:

1.     Physical Tokens

When verification is required, the user enters the code that appears on the token display, which is a physical token created by a device they carry. However, due to their small size and potential for theft to cause chaos, physical tokens have become less common in use these days.

2.     Code Generator Software

More people use this type of two-factor authentication compared to biometrics or tangible tokens combined. Installing the code generator application on your phone is necessary in order to produce a code and password. This special code is especially hard to figure out because it changes every thirty seconds.

3.     Authenticator Applications

Similar to how a code generator operates the authenticator application provides you with a push alert on your phone that needs to be approved for you to log in. This procedure is far safer than using a code generator because it is harder to steal your phone and enable access than it is to take your cellphone and figure out the code.

4.     Biometrics

Biometrics is seen as a more modern form of two-factor identification as it uses a unique characteristic of you, like a fingerprint or a retinal scan. This method is said to be the most reliable since it is not possible for two separate individuals to have identical fingerprint.

The Bottom Line

Most of the time, in order to utilize cryptocurrencies, you must have a connection with exchanges, and in order to access exchanges, you must have some kind of account security. One of the best and easiest security precautions you can take for your account is definitely two-factor authentication.