What is two factor authentication (2FA)?
Two factor authentication, two-steps-verification and 2FA all mean the same thing. It is a method to better secure your account against criminals. Normally speaking you only need a username and password to get access to your account. In case your information fall in the hands of criminals, they will have access to your account.
You solve this problem (to a certain extent) by enabling two factor authentication. When this is enabled, you will have to make use of two different methods to log in. In addition to your username and password, you must therefore verify yourself in another way. We advise you to always enable two factor authentication, certainly for important accounts of brokers and exchanges where you have funds.
How does two factor authentication work?
Two factor authentication is used in all sectors and is made use of in different ways. When you login on a government website you receive, most of the time, a temporary SMS-code on your smartphone, to verify your identity. The cryptocurrency world often makes use of the Authenticator app (Google Play and App Store). With this app you will temporarily see a 6-digit code which you can enter when logging in.
Keep in mind that if you lose your phone, you will also lose all your verification codes. When you add a new service to the app you will receive a backup code. Keep this backup code in a safe place. Another option is to use the app Authy, which creates backups on its own and sends them to, for example, your Google Drive.
Am I 100% safe now?
No, in theory it is still possible to access your account. The chances of this happening are very little, but the chance still remains. That is why we advise you not to leave funds at exchanges or brokers. A criminal can use phishing to find out your temporary code (because you enter it yourself) and enter it on the real website. When someone knows your backup code, he will also be able to view your temporary codes. And in some cases, the service provider itself gets hacked, which means criminals get access to all 2FA codes and are capable of shutting this protection off.