Building a well-balanced cryptocurrency portfolio is one of the most important steps you can take on your cryptocurrency journey. Whatever type of investor you are, a balanced portfolio of various assets is required because it guarantees that your capital is not entirely affected when the price of one or more assets falls, allowing you to secure the overall portfolio regardless of market volatility.
While there are easy steps to build a balanced crypto portfolio, even as a beginner, safeguarding your portfolio is difficult. Wallet breaches and digital theft are big challenges in your crypto journey since fraudsters and cyber attackers focus their time and effort on gaining unauthorized access to your assets.
Even though volatility is regarded as the most significant disadvantage of cryptocurrency investment, the safety and security of your crypto portfolio are the most serious threat in your cryptocurrency journey. Over $3.8 billion was lost in 2022 alone due to crypto hacking, making it the year with the biggest crypto heists in history, underlining the importance of protecting your crypto portfolio.
With the alarming rise in the number of crypto hacks of individuals and institutions in the last few years, users have taken numerous crucial measures to safeguard their crypto holdings. However, among several practices of securing your crypto portfolio from fraudulent activities, enabling and setting up two-factor authentication gives your crypto portfolio an additional layer of security.
What is two-factor authentication? How do you set up two-factor authentication to safeguard your cryptocurrency portfolio? This article will review two-factor authentication and show you how to set it up to protect your cryptocurrency portfolio. Let's get started!
What is Two-factor (2FA) Authentication?
Two-factor authentication (2FA) is a crucial security mechanism that adds a second layer of security to your password to ensure only you have authorized access to your account. As a result, this additional protection layer makes it technical and more difficult for hackers to access your funds, as they cannot crack your login with a single attempt.
2FA is more secure than any conventional authentication system that relies on only one authentication element (single-factor authentication), which normally requires only a password or PIN. Furthermore, 2FA protects your portfolio from phishing, social engineering, and password brute-force attempts. Hence, to access your crypto portfolio with 2FA enabled, you'll need the default login details of the account and a 2FA code to gain access to the portfolio.
Why You Need 2FA Authentication for Your Portfolio
Two-factor authentication gives your crypto portfolio an additional layer of security by requiring a code or additional information to access your portfolio. It is an enhanced security feature that ensures only you have valid access to your account. Once enabled, it becomes difficult for anyone without the 2FA code to access your portfolio without your consent by providing the code.
When someone tries to access your crypto wallet, a dynamic code will be delivered to you to authorize the transaction, and if you detect it's from an unknown source, you will refuse to grant access. Since anyone can't crack your login with a single password, this extra security layer makes it far more difficult for hackers to access your funds. However, you must never disclose your 2FA code to anyone, as no crypto platform will ever request it without your knowledge.
Using two-factor authentication (2FA) is one of the most effective ways to safeguard your cryptocurrency assets, whether you keep them online or offline. 2FA prevents an attacker from bypassing your password and allows you to restore access quickly before your wallet is compromised and your valuables are stolen.
As crypto is subject to cyber attacks, and because the popular saying goes, "with great power comes great responsibility," the security of your cryptocurrency holdings is entirely up to you. There is no fraud protection or asset recovery mechanism if your crypto accounts are hacked. Hence, 2FA is necessary.
How to Set Up 2FA
There are different ways to enable two-factor authentication to protect your crypto portfolio. While some are more powerful or technically advanced than others, they all serve the same purpose: to enhance the security of your crypto portfolio.
Some of the ways you can set up 2FA for your crypto portfolio include the following:
Mobile Authenticator Platform
The mobile authenticator application generates a one-time code to obtain access to your portfolio. It sends the code to your phone via a push message with an expiry time. The mobile authenticator platform transmits the access code by SMS, email, or any quick notification mode of obtaining the code straight on your phone. It is a secure method of enabling 2FA for your portfolio because it is difficult for anyone to obtain these codes without stealing your phone and answering your security questions.
Hardware Authenticator
Hardware token is the oldest form of two-factor authentication. It is a physical token that generates a code; when authentication is required, the code appears on the token screen and is entered by the user. You enter the most recent code displayed on the device's screen to gain access using a hardware authenticator. However, hardware authentication has declined recently because it can be easily misplaced due to size. Another drawback is that it is not safe from being hacked.
Software Authenticator
The most widely used 2FA method nowadays is software authentication. It employs a time-based one-time password (TOTP) produced by a soft token that updates every 30 seconds. The security key is typically a QR code you may scan with your mobile device to generate a string of digits.
The software authenticator functions similarly to the mobile authenticator. However, instead of receiving the code via push notification, the code is presented on the authenticator's app. As a result, to use this two-factor authentication method, you must first download and install a free 2FA app on your smartphone or PC. Once installed, this application will be linked to your crypto platform as additional security for your assets.
How to Set Up 2FA For Your Crypto Portfolio
You must build your crypto portfolio on a reliable site to safeguard your cryptocurrency against hackers and other fraudulent acts. One of the most reliable crypto wallets with enhanced security to build your crypto portfolio is Cwallet.
Cwallet is a unique multifunctional wallet that combines centralized and decentralized features. Its futuristic technology bridges the gap between Web 2.0 and Web 3.0 by providing everyone with a free and all-inclusive set of crypto tools.
Cwallet values security and has enabled Two-Factor Authentication (2FA) to prevent unauthorized access to your account. Adding two-factor authentication to your wallet adds a layer of security, making it significantly more difficult for hackers to gain access even if they know your password.
To set up 2FA on your Cwallet account, download and install an authenticator on your smartphone and follow these simple steps.
- Go to the Cwallet's security settings on your account.
- Go to the two-factor authentication tab, toggle the button to enable it, and enter your Cwallet password to access the 2FA setting page.
- A QR code will be displayed for you to scan. Scan the QR code with your authenticator app.
- Lastly, carefully save the backup code displayed for recovery purposes.
2FA is now enabled on your Cwallet account.
Easy, right? So, why wait? Download the Cwallet app for free and enjoy fast, simple, cheap, and easy access to crypto with zero extra fees on all services.
