What Is 2FA? How Two-Factor Authentication Can Protect Your Cryptocurrency 

Enhance your online security with two-factor authentication (2FA). Learn what it is, how it works, and why it’s crucial for protecting your online accounts.

Jan 24, 2024
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What Is A 2fa F 1

Key Takeaways:

  • Two-factor authentication (2FA) significantly enhances online security as it uses two different types of identification, which adds an extra layer of protection to online accounts.
  • 2FA involves combining factors like something you know (password) with something you have (mobile device), mitigating the risk of unauthorised access even if your passwords are compromised.
  • Different methods of 2FA include SMS authentication, mobile authentication apps, and hardware tokens, each with different strengths and weaknesses.
  • Crypto.com offers 2FA for added security, using Time-based One-time Passwords (TOTPs).
  • Get step-by-step instructions on enabling 2FA and best practices for using it effectively across all your accounts.

Introduction

One of the most effective ways to enhance online security when trading Bitcoin and other cryptocurrencies is two-factor authentication (2FA). In this article, we explore what 2FA is, how it works, and why it is essential in safeguarding your online accounts.

How Does Two-Factor Authentication Work?

2FA is a security measure that adds an extra layer of protection to online accounts by requiring two different types of identification before granting access. 

These two factors fall into three categories: 

  • something you know (e.g., a password) 
  • something you have (e.g., a mobile device) 
  • something you are (e.g., your fingerprint)

By combining two of these factors, 2FA significantly reduces the risk of unauthorised access, even if a password is compromised. The most common implementation of 2FA involves a unique, time-sensitive code sent to your mobile device after entering your password. This code must be entered in addition to your password to gain access to your account. 

The idea behind this is that, even if someone manages to obtain your password, they would still need physical possession of your mobile device to gain entry, making it significantly harder for hackers to breach your accounts.

The Importance of 2FA

In recent years, the number of cyberattacks and data breaches has increased. Hackers are constantly finding new ways to exploit vulnerabilities in online systems, exposing users to identity theft, financial fraud, and other malicious activities. This is where 2FA comes into play, acting as a powerful guard against unauthorised access.

By requiring an additional form of authentication, 2FA adds an extra layer of security to your online accounts. It acts as a barrier, ensuring that, even if a password is compromised, the chances of a hacker gaining access to your accounts are significantly reduced. 

Read our essential security tips to keeping your crypto account safe.

Common 2FA Methods

There are several methods of implementing 2FA, each with its strengths and weaknesses. The most common methods include:

1. SMS Authentication: This method involves receiving a unique code via SMS on your mobile device after entering your password, where you then enter this code to complete the authentication process. While SMS authentication is convenient, it is not the most secure method, as hackers can intercept the code through various means.

2. Mobile Authentication Apps: Mobile authentication apps, such as Authy, generate unique codes that refresh every few seconds. They provide a higher level of security compared to SMS authentication, as the codes are not sent via SMS nor susceptible to interception.

3. Hardware Tokens: Hardware tokens are physical devices that generate unique codes. These tokens are typically small and portable, making them convenient to carry around, and are often used by companies as part of corporate security. Hardware tokens are considered one of the most secure forms of 2FA, as they are not vulnerable to hacking or interception. However, they can be lost or stolen, which poses a risk.

Learn more about common cryptocurrency scams and how to avoid them in this article.

Keeping Your Crypto.com Accounts Safe With 2FA

Crypto.com offers 2FA for all of its products to keep users secure — always.

Crypto.com uses a Time-based One-time Password (TOTP) for 2FA, which involves generating a temporary, unique one-time, six-digit code that only works for 30 seconds. To perform actions that affect your funds, you need to enter this code in addition to your password.

These actions include:

  • Send cryptocurrency to other app users
  • Cryptocurrency withdrawal
  • Fiat withdrawal
  • Wallet address whitelist

How to Enable 2FA in the Crypto.com App

  1. From the menu in the Crypto.com App, tap on Settings > Security > 2-Factor Authentication > Enable 2FA.
  2. Enter your passcode.
  3. Scan the QR code with an authentication app or copy the code to add it manually by pressing on the small papers icon.
  4. Minimise the Crypto.com App and open up the Authenticator app.
  5. In the Authenticator app, select the option to add another account.
  6. Choose the option to manually enter the secret key (the long code you’ve copied).
  7. Paste the code in the text field by pressing and holding over it (you should see the option to paste).
  8. Save the changes.
  9. The Authenticator app will start to generate 2FA codes with an expiration time of 30 seconds. Bear in mind that the code should consist of numbers only.
  10. Press and hold over the six-digit-generated code in the Authenticator app to copy it. (Ensure you can complete step 9 within 30 seconds.)
  11. Open the Crypto.com App.
  12. After entering your normal passcode again, click on the blue button ‘Proceed to verify’ and then paste the six-digit code from the Authenticator app.

For more information, read our guides on how to set up 2FA for your suite of Crypto.com products:

Crypto.com App

Crypto.com Exchange

Crypto.com DeFi Wallet

Crypto.com NFT Marketplace

Best Practices for Using 2FA

To maximise the effectiveness of 2FA, it is essential to follow a few best practices, including:

  1. Enable 2FA on all accounts: Implement 2FA for all platforms and services that support it, including social media, email, and financial accounts.
  2. Keep backup codes in a secure location: Save backup codes provided by platforms and services in a secure location, such as a password manager or encrypted document. These codes will be invaluable if you lose access to your primary 2FA method.
  3. Regularly review your 2FA settings: Periodically check your 2FA settings to ensure everything is up to date. Remove any old or unused authentication methods and add new ones if necessary.

By following these best practices, you can make the most of 2FA and significantly enhance your online security.

Here’s what phishing attempts look like in real life.

Conclusion — Should You Use 2FA?

Two-factor authentication (2FA) provides a powerful layer of protection against unauthorised access to online accounts. By requiring an additional form of authentication, 2FA significantly reduces the risk of identity theft, financial fraud, and other malicious activities.

By enabling 2FA on all your accounts, choosing secure authentication methods, and following best practices, you can enhance your online security and utilise the cryptocurrency space with greater peace of mind.

Due Diligence and Do Your Own Research

All examples listed in this article are for informational purposes only. You should not construe any such information or other material as legal, tax, investment, financial, cybersecurity, or other advice. Nothing contained herein shall constitute a solicitation, recommendation, endorsement, or offer by Crypto.com to invest, buy, or sell any coins, tokens, or other crypto assets. Returns on the buying and selling of crypto assets may be subject to tax, including capital gains tax, in your jurisdiction. Any descriptions of Crypto.com products or features are merely for illustrative purposes and do not constitute an endorsement, invitation, or solicitation. 

Past performance is not a guarantee or predictor of future performance. The value of crypto assets can increase or decrease, and you could lose all or a substantial amount of your purchase price. When assessing a crypto asset, it’s essential for you to do your research and due diligence to make the best possible judgement, as any purchases shall be your sole responsibility.

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