How important is security? The answer is obvious—it is extremely important. We take a lot of care while securing our possessions—both online and offline. Using a strong password, making sure the data is being sent to a trusted service provider, installing anti-virus softwares — these are usually the steps people take to make sure their digital life remains secure.
The Problem with Single Factor Password-based Authentication
However, the unfortunate truth of the matter is that while on the surface these methods and practices may seem to be quite safe and secure, it is absolutely not.
The data you send to what seems like a legitimate and proper website might just be a phishing scam or it may get intercepted by a hacker while being transferred.
Passwords, no matter how unique and sophisticated, always run the risk of being stolen. Keystroke malware is a software that after being installed on your device can easily read all your passwords. This is done through some security vulnerability which records everything you type using your keyboard. The passwords are sent to the hackers in a way so efficient that you might as well have given the hacker your password with your own hands.
An Anti-Virus software usually isn’t cheap and needs to be regularly updated. If these updates aren’t timely installed, then it can become obsolete and useless in a matter of hours.
So this leaves the question – What can really be done to improve the security of a person’s digital life? Enter Two-Factor Authentication.
Two-Factor authentication—to put it very simply—is anything which is required in addition to your user ID and password before you get to access your data or your account. For example, the One-Time-Password, or OTP, that you receive on your phone from the bank when you try to make an online payment using your debit card.
The Two-factor authentication is not just simple, but also extremely effective when it comes to preventing a breach of online security. Even for a skilled hacker, obtaining an OTP that has been sent your phone only when you initiate a payment or a login is much harder than getting your basic password.
This is the reason why almost all major websites are starting to mandate two-factor authentication when it comes to their users logging in and why banks refuse to allow a transfer until two-factor authentication has been successfully completed.
This is why cryptocurrency exchanges have started to give two-factor authentication the importance it deserves.
Cryptocurrency Exchanges and Two-Factor Authentication
While cryptocurrency exchanges are inherently quite secure, 2018 has seen some of the biggest cases of cryptocurrency theft. Over 500$ worth of cryptocurrencies were stolen in one such incident which announced to the world that there was a need to massively increase the security when it comes to cryptocurrency exchanges.
The password you use for a cryptocurrency exchange is just as vulnerable to keystroke malware as your free account on Club Penguin. Since one of those accounts is probably far more important than the other, it is imperative that it should have the security of a much higher standard.
Using two-factor authentication with your crypto exchange can go a long way in ensuring your cryptocurrency remains secure.
Even if the two-factor authentication method that your exchange uses aren’t very convenient—long duration to the get the OTP, extremely small timeout windows—or aren’t perfectly 100% secure—like sending the OTP to your email which itself could possibly be compromised—it is still a significant upgrade from the plain single factor password-based authentication that a majority of people and companies still use.
Cryptocurrency isn’t at its peak value right now, and you may feel that the assets you own aren’t worth enough for you to set up a two-factor authentication. But just the small possibility that the value of your assets may quadruple overnight makes it necessary that your crypto is as secure as it can possibly be.
P.S.: If even two-factor authentication with your cryptocurrency exchange isn’t satisfactory enough to ease your worry about your crypto assets being stolen, you should check out cryptocurrency insurance which can help you finally stop worrying and get a good night’s sleep.
What are your views on the two-factor authentication method? Let us know in the comments section below:
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Bank of Hodlers is building a customer-centric bank on the blockchain, by providing financial services which include loans and payments backed by your digital assets.
We are organizing a Bounty Program where you can earn up to 1700 BOH tokens (which will be equal to $340 at the time of our sale) by completing the most simplest of actions. The total allocation for the bounty is $1 million. Participate now and help us create an ecosystem where people will be able to bank on their digital assets.