Two-Factor Authentication (2FA) for Bitcoin Exchanges

When buying bitcoin, it’s good practice to use exchanges that support extra layers of security to login. For this purpose, it’s most common to use 2fa standards (sometimes also called MFA). This means that alongside a strong password (generated by a password manager such as Bitwarden) or random passphrase you also need a one-time code, a security key or a passkey in order to logon into the exchange. The keyphrase to remember is that you need to supply something you know (a password) and something you have (like a security key, or a device) to approve the login.

Are you concerned about the security of your bitcoin? If so, you may want to consider exchanges supporting Two-Factor Authentication (2FA). 2FA is a powerful security feature requires you to provide two forms of identification to access your online accounts or services, making it much harder for hackers or cybercriminals to gain unauthorized access.

With 2FA or MFA as others call it, you’ll typically need to provide your username and a password as your first factor to log in. Then a second form of identification such as a code sent via SMS, a mobile app, a physical token such as a Yubikey or Nitrokey, or even a biometric factor like a fingerprint or facial recognition. By requiring two different forms of identification, 2FA makes it much more difficult for cybercriminals to gain unauthorized access to your accounts, even if they manage to obtain your password.

Types of 2FA methods

There are different types of 2FA methods that can be used with bitcoin exchanges and wallets. Here we mention the top three 2FA’s used in order of the least and most secured:

  • SMS-based 2FA: A code is sent to the user’s mobile phone via SMS, which must be entered in addition to their password to access the account. This method is generally not recommended as a 2FA.
  • Time-based One-Time Password (TOTP): You can install a TOTP app on your mobile device or computer, such as Google Authenticator or Authy, which generates a new code every 30 seconds. Some external security keys, such as the YubiKeys also come with a built-in app for this.
  • Universal Second Factor (U2F): U2F is a secure authentication standard that allows users to access multiple online services with a single security key such as a Yubikey or Nitrokey, instantly and without any additional software or drivers. Note that some bitcoin hardware wallets such as Trezor and Ledger can also be used as a security key on the web. See also this explanation from Trezor.

Enabling 2FA on a bitcoin exchange or wallet is strongly recommended to protect against unauthorized access and potential theft of bitcoin stored in the account. However, it does not protect your bitcoin from the exchange. If the exchange goes bankrupt or simply disappears, so does your bitcoin. Make sure you have a non-custodial wallet if you want to prevent this from happening.

kraken login 2fa screenshot

Bitcoin exchanges supporting 2FA

If you’re a bitcoin user, you’ll be glad to know that many popular wallets and exchanges offer the option to enable 2FA to provide an extra layer of security to your account.

  • Hodl Hodl is a peer-to-peer bitcoin exchange platform that requires you to enter a 6-digit code every time you log into your account. You need to have a device with a 2FA application such as Authy or Google Authenticator installed.
  • CoinCorner is a bitcoin-only exchange. To login, you need to enter a randomly generated code from the Google Authenticator app, as well as your email address and password.
  • Bitnob is a bitcoin-only exchange for users in Nigeria, Ghana and Kenya. You need a six-digit code generated from your authenticator and paste it into your account after your email and password before you can access your Bitnob account
  • Swan Bitcoin is a bitcoin-only exchange that allows you to buy bitcoin with a bank account. It uses 2FA to secure your account using an authenticator app such as Google Authenticator.

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It is important to note that in most cases, you must enable 2FA yourself on the wallet or exchange you are using. When enabling 2FA you will receive backup codes that you can use when your 2FA method is not available to you. It’s vital to store these backup codes in a safe place.

These are just a few of the many bitcoin wallets and exchanges that support 2FA. However, while 2FA is an essential security measure, it isn’t perfect, and you should still take extra precautions. Think here of using strong passwords, or passphrases, and maybe also using a different e-mail alias per service.

Furthermore, use caution when downloading or using any new wallet, and always ensure that the wallet comes from a reputable source. It is also strongly advised that you keep your bitcoin in a self-custodial wallet rather than an exchange’s custodial wallet.

Andy Owethu Avatar

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