#Blockchain
#Security & Data Privacy
A security feature, 2FA is an authentication method for users to access their accounts or wallets in a safe and secure manner.
Key Takeaways
• 2FA stands for two-factor authentication.
• It is a type of multi-factor authentication (MFA), an authentication method used to access email accounts or trading wallets.
• 2FA is a security feature as per which a user is required to authenticate their identity in two distinct, separate ways to access their account.
The security of crypto funds has been a matter of concern for the broader financial world since the advent of the decentralised finance (DeFi) economy. Authorities have consistently targeted the Web3 sector due to crypto exploits worth millions of dollars year by year.
In a rather ironic turn of events, the X account of the U.S. Securities and Exchange Commission (SEC) was compromised in January 2024 as the members of the regulating agency had disabled the two-factor authentication (2FA) feature on their social media accounts. The hacker who accessed the X account in an unauthorised manner put out incorrect information about the issuance of spot Bitcoin ETFs.
The regulator later updated that X Support had disabled 2FA at the SEC staff’s request in July 2023 which led to the account getting compromised. So, the incident only makes us more aware of the importance of crucial security features such as 2FA for all stakeholders, including exchanges, individual traders, and regulatory bodies.
Two-factor authentication (2FA) is a type of multi-factor authentication (MFA), an authentication method for accessing accounts or wallets. 2FA is a security feature as per which a user is required to authenticate their identity in two distinct, separate ways to gain access to an entity.
The entity can be a door, a banking account, or an email account. 2FA requires a user to submit two types of information before they can gain access to their account. The information can be:
• A password is a string of characters that is used to differentiate an authorised user from an unauthorised user.
• A personal identification number (PIN) is a numeric or alphanumeric string that is used to authenticate a user to an account.
• A one-time password (OTP) is a string of characters that is automatically generated and sent to a mobile device to be used for user authentication.
• A physical security key is a physical device, usually a USB drive, that is used to authenticate your credentials to access an account.
• A security Q&A is a secret question and answer that is used by a user to prove their identity, giving an extra layer of security to your account.
• Biometric data such as fingerprint, face or voice is a personal kind of authentication method in which you physically prove your identity.
In most cases, a password is entered first, followed with any of the above information. Even though it’s a popular and common security practice, a lot of users don’t implement it. If a user uses the same password on multiple websites, they may be more vulnerable to password hacking than they think.
Image: BitDelta post on X (previously Twitter)
As mentioned above, we even saw a regulating body as prestigious as the SEC not implementing it. But its importance is securing systems cannot be underestimated. 2FA is very helpful in cases when a password is exposed to an external party.
The party cannot gain unauthorised access to the account only with the password as another detail is also mandatorily required. Most reputed platforms require users to implement 2FA so that their accounts are completely secure. Note that hackers deploy several ways and tools to unlawfully gain access to your account. The most common methods are phishing attacks and credential stuffing.
• A phishing attack involves a hacker tricking you into revealing sensitive information such as username, password, date of birth etc. It can happen over an email, a phone call or a video conference. A person in panic and anxiety often ends up falling prey to the sweet talk of these bad actors and revealing such sensitive information despite their best efforts.
• Credential stuffing involves a hacker using a stolen set of usernames and corresponding passwords to access those accounts through automated login requests on a large scale. Users required to operate multiple accounts due to work commitments often use the same password for different accounts. Often, a person doesn’t bother using different credentials for personal and work accounts. If one set of credentials gets compromised, then the other account cannot be secure either.
BitDelta recommends you change your password every few months. In fact, BitDelta recommends that you enable 2FA among other measures to secure your trading account.
Individuals use 2FA to secure their email accounts, online bank accounts, blockchain-based services or DeFi wallets. Organisations use 2FA to securely keep the assets and other crucial details of their employees and customers.
To gain access to online networks and databases, many corporations use 2FA. For example, employees may be asked to input a second code to log into the remote workstations to work outside the office. The main benefits offered by 2FA are:
• 2FA is a highly convenient method to secure your account. You only need to remember your password and the second part is submitting your biometrics or OTP received on mobile phone.
• 2FA keeps your account secure against cyber-attacks and exploits.
• 2FA is a simple and user-friendly security feature which makes it highly accessible to lay users.
2FA is a very popular method of account authentication. But there are a few limitations of 2FA that both organisations and users need to be aware of:
• It takes an extra step and additional time for a user to log in to their account. It isn’t very helpful in an emergency such as a cyber fraud when you need to access your account immediately.
• There is a dependence on a third-party at the second step whether it's a SIM card provider or a physical security key. If your SIM card isn’t receiving a signal or you forget your physical device at home, there is no way you can access your account.
• There is no sense of complete security. Bad actors have found ways to hack your account through man-in-the-middle (MiTM) attacks even if you have enabled 2FA.
To say that 2FA is completely safe and keeps your account or wallet secure against all vulnerabilities would be an exaggeration. Users should know that 2FA isn’t entirely secure. If an unauthorised party chooses to deploy other methods such as phishing attacks, account recovery procedures, and malware, 2FA cannot be a full proof security method.
Nonetheless, it’s an advanced security system that is much better than barely a password. Though 2FA isn’t full proof, it is way better than none.
Users don’t realise that their passwords can be easily compromised, especially if they have the same password for more than one website. licking on links sent via unreliable sources via emails can also lead to password theft. In such instances, 2FA is very helpful as it doesn’t let an unauthorised user to access an account with the stolen password.
The other party can have your password, but they can’t have your device (smartphone where OTP is received) or impersonate you (biometrics). Therefore, most credible bodies recommend users implement 2FA on their accounts for maximum security.
Users should keep the following points in mind while implementing the 2FA method for their accounts:
• You should mandatorily implement 2FA for all your accounts, whether it’s your email addresses, banking accounts, online wallets, or blockchain services. This practice keeps your private conversations and funds safe.
• Invest in time to learn about 2FA in detail. Keep an eye out for the latest updates in the 2FA technology and educate yourself more about such information. Implement the best available method.
• Simplicity is no byword for naivety. You don’t need to create a very complex password or PIN. Keep it simple yet powerful and unique, and you will be good.
BitDelta has built a full-proof security infrastructure to ensure the complete safety and security of users' funds and other crucial details. Therefore, it is recommended that BitDelta traders implement the 2FA security feature to keep their accounts secure. Take the following steps to enable 2FA on your BitDelta account:
A. 2FA stands for two-factor authentication. It is an authentication method that is used to access email accounts or trading wallets.
2FA is a security feature in which a user is required to authenticate their identity in two distinct, separate ways to access their account. The two pieces of information a user needs to enter are among the following:
• Password,
• PIN,
• OTP,
• Security question,
• Physical security key, or
• Biometrics such as fingerprint, face, or retina.
In most cases, a password is entered first, followed with any of the above information.
2FA is important because it provides an additional layer of security to an account or wallet. If you are using only a password to secure your account, there is a highly vulnerable to a breach of security. 2FA ensures that your account is secure and doesn’t fall prey to a cyberattack.
2FA is helpful is that in the case of an exposure of the password to an external party, that party cannot gain unauthorised access to the account due to the party’s lack of access to the second mandatory factor such as PIN or OTP.
The advantages of 2FA are:
• Convenience
• Security against cyber-attacks and exploits
• Simple and user-friendly instructions
The disadvantages of 2FA are:
• Extra step
• Involvement of a third-party
• No sense of complete security
Even though it is considered very safe, hackers can get through 2FA through tricks such as account takeover, phishing attack, malware, device theft or SIM swapping.
A password followed by a security Q&A or a physical security key is the safest 2FA method because either of them cannot be easily imitated. While a Q&A costs nothing, a physical security key, usually in the form of a USB device, can be expensive.
2FA is a subset of MFA. While 2FA requires two kinds of information to grant you access to your account, MFA requires two or more kinds of information to do the same. For example, a 2FA-enabled email account might require you to enter a password followed by an OTP. An MFA-enabled email account might require you to enter a password, then an OTP and a biometrics verification in the end to grant you access to your account.
Most reputed organisations require users to follow the 2FA authentication method to log in to their accounts. Usually, the combination is a password and a PIN or biometric data. As long as there is no better security measure, 2FA should be mandatory.
This article is for informational purposes only and not intended as investment or financial advice. It contains opinions and speculations that are subject to change without notice.
The author and publisher disclaim any liability for decisions made based on the content of this article. Readers are advised to conduct their own research and consult a financial advisor before making investment decisions.
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