What Is Two-Factor Authentication (2FA)?

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One of the basic questions when entering the Web3 world is how to achieve a high level of security for your assets. After all, this problem is emerging as a global one, given that not only are crypto wallets at risk, but the consequences of targeted hacking or identity theft can be diverse. Basic data theft alone can lead to that information being used to obtain fraudulent credit cards and finance shopping sprees, damaging the victim’s credit rating. This is where the main actor of our text appears – 2FA.

In addition to individuals, different companies can also be victims of various hacker attacks. In the last few years, we have witnessed a massive increase in the number of websites that lose the personal data of their users. As cybercrime becomes more sophisticated, companies realize their old security systems are no match for modern threats and attacks. Sometimes, it is simple human error that leaves them vulnerable. The worst thing is that it is not only the user’s trust that can be violated, but also the organizations themselves, be it global companies, small firms, or startups, can suffer serious financial and reputational losses. History has shown that hackers attack more successful companies in most cases.

Introduction to 2FA

The point of this text is how to protect an individual entering the crypto and Web3 world. So we will dedicate the rest of it to exactly that. In addition, the websites themselves certainly want to protect their users in the best possible way and thus gain the reputation of a reliable site, thus forcing them to protect access to the account in an additional way, in addition to the password. This system is called Two-Factor Authorization, or 2FA for short, and we’ll talk more about it in this article.

Why the Need for Two-Factor Authorization?

Setting a security password has taken a big step in history. Then, for the first time, each user had the opportunity that only he could access his data. However, passwords are not secure enough by themselves, and there are many reasons for this. Some people have short-term memory and use random numbers like 12345678, 11111111, their date of birth, etc. as passwords.

Statistics have shown that the largest number of stolen passwords were exactly this way. This is the first option that hackers try when accessing your account. In addition, today, almost every website on the Internet requires the opening of an account, and it happens that people enter passwords in a pattern and use the same password in all places. So, it is enough for a hacker to break the password in one place and use it on all the other accounts you have.

Another recent danger is the use of unverified Internet connections. Just like connecting to some public Wi-Fi can also endanger your security. All this leads us to the point that a password is not enough by itself. With an additional request after entering the password, you prevent someone from accessing your profile, regardless of the fact that they have obtained your password. This is exactly what Two-Factor Authorization, or Double Authentication (2FA), brings us.

What Is Two-Factor Authorization?

Considering that a large part of our lives takes place on mobile devices and laptops, it’s no wonder that our digital accounts have become a magnet for cybercriminals. In addition, as we said, malicious attacks on governments, companies, and individuals are becoming increasingly common. The very technology that hackers use during their attacks is more and more modern. Fortunately, it’s easy for businesses to add an extra layer of protection to all their user accounts. An increasing number of sites require users to apply another form of authorization besides the password. Sometimes, they can even ask their users for a KYC Procedure.

Two-factor authentication (2FA) is a security process where users provide two different authentication factors to verify themselves. It represents a subset of multifunctional authorization, which uses even three or more forms when accessing an account. 2FA is applied to protect better both user data and resources that the user can access. It provides a higher level of security than single-factor authentication (SFA) methods.

2FA Methods

Two-factor authentication methods rely on the user providing a password as the first factor. After that, another factor can be an SMS code, fingerprint, or face on the phone. Sometimes even a hardware or software token. In this way, two items are connected. The first is what only you know, which is the username and password, while the second is something you own. Is it a code that is created through an application (most often Google Authenticator), an SMS code with a short expiration date, or something else.

Two-factor authentication adds an extra layer of security to the authentication process by making it harder for attackers to access a person’s devices or online accounts. Namely, even if the victim’s password is hacked, the password alone is not enough to pass the authentication check. It protects against phishing, social engineering, and password-strength attacks and secures your logins from attackers exploiting weak or stolen credentials.

Types of 2FA Factors

As we have already mentioned, the point of Two-Factor Authorization is to tie the knowledge factor (password) to the possession factor. The important thing about this code is that it has a short shelf life. Even if a hacker gets your code at some point, it has already expired, and will not be able to access your account. In addition to knowledge and possession, several other factors can additionally protect your profile.

Biometrics Factor

Also known as the inheritance factor, it is something inherent in the user’s physical self. These can be personal characteristics mapped from physical features, such as fingerprints authenticated through a fingerprint or face reader.

It is most often used on smartphones since most Apple and Android devices already have this system on their phone as a way to unlock the screen. However, various scientific companies also use this factor, most often through the eye pupil.

Location Factor

One of the factors that can also be useful. But in our experience, the location factor is less important than the others. It usually indicates the location from which the authentication attempt is made. This can be done by limiting authentication attempts to certain devices in a certain location or by tracking the geographic source of authentication attempts based on an IP address or some other geolocation information, such as GPS data, obtained from the user’s mobile phone or another device. However, this can go down the drain when using a VPN on the device.

Time Factor

Limits user authentication to a specific time window in which login is allowed. This limits access to the system outside that window. If you access your account and forget to log out after a certain time, access to your profile will be immediately locked again, and you will have to access it again with the Password and 2FA code. For example, if you accessed your account on a CEX crypto exchange via mobile phone, the same second you exit the application, you will have to re-enter the code to access your account.

Is Two-Factor Authorization Safe, and Should This Type of Protection Be Applied?

Anyone can be a victim of a hacker attack. This is best described by the recent event when the official account of the American SEC was hacked. The attack was caused by a fake tweet about a Bitcoin ETF being approved. This made this federal agency an object of ridicule. Its basic function is to ensure the safety of all users of the stock exchange. The reason for this hack was confirmed by Elon Musk himself, and it was the lack of two-factor authorization of the SEC Twitter account.

Accordingly, it is clear that two-factor authentication (2FA) improves security. But 2FA schemes are only as secure as their weakest component. For example, hardware tokens depend on the security of the issuer or manufacturer. However, if you opt for reliable methods, two-factor authentication can drastically improve your security. This means that the potential compromise of only one of these factors will not unlock the account. Even if your password is stolen, the chances of someone else having information about your second factor are very small. On the other hand, if the user uses 2FA properly, websites and applications can be more confident about the user’s identity and unlock the account.

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