When you deal with cryptocurrencies and other digital assets, you already know that you cannot compromise on security. The digital nature of these digital assets makes them susceptible to theft and unauthorized access. Protecting your cryptocurrency wallet from potential threats is a top priority for every investor.
Google Authenticator and SMS-based authentication are popular methods for safeguarding your digital riches, especially when using custodial wallets. In this article, we will take a deeper dive into each of these authentication methods, seeking to answer the critical question: Which is better for securing your crypto wallet?
However, before arriving at a verdict, let's explore why multiple layers of security for cryptocurrency wallets are paramount.
Importance of Two-Factor Authentication For Crypto Wallet Security
Unlike traditional bank accounts, which have various layers of security and government-backed insurance, cryptocurrency wallets provide little or no safety nets; hence, great responsibility lies on you as a user to protect your assets.
If you use a non-custodial wallet, you are in charge of your private keys and have the SOLE RESPONSIBILITY of keeping your digital assets safe. In the case of a compromise, wallet providers and third-party apps can do almost nothing to help you retrieve your assets.
However, if you use a custodial wallet, we can say that the responsibility of keeping your assets safe is shared between you and the wallet provider. Most wallet providers, like Cwallet, do a great job of securing users assets, but users still need to take proactive measures to provide extra layers of security for their assets.
Two authentication methods have become prominent in the quest for heightened security for custodial wallet owners: Google Authenticator and SMS-based authentication. Both methods offer an additional layer of protection beyond just a password, making it significantly harder for unauthorized parties to access your crypto holdings. While their shared goal is the same, they employ different mechanisms.
What is Google Authenticator, and How Does It Work?
Google Authenticator is a mobile app developed by Google that provides an additional layer of security for online accounts, including cryptocurrency wallets. It is part of two-factor authentication (2FA) or multi-factor authentication (MFA) methods. Google Authenticator is a digital token generator that produces time-based one-time passwords (TOTPs) or HMAC-based one-time passwords (HOTPs) to verify a user's identity during the wallet's login process.
Once set up, Google Authenticator generates temporary six-digit codes that change every 30 seconds. These codes are based on a shared secret key and the current time, ensuring they are valid only for a short duration. When users attempt to log in to a secured account (e.g., a crypto wallet), they enter their username and password as usual.
Afterward, they are prompted to enter the current OTP displayed on their Google Authenticator app. The time-based nature of the OTPs ensures that even if an attacker intercepts a code, it will quickly become invalid, reducing the window of opportunity for unauthorized access. Additionally, there is no need for an internet connection or network coverage with Google Authenticator.
What is SMS-Based Authentication, and How Does It Work?
SMS-based authentication is a security method that relies on Short Message Service (SMS) messages to verify a user's identity during the login process. It involves sending a one-time code to the user's registered mobile phone number, which they must enter to gain access to their account or perform certain transactions. This method is used for two-factor authentication (2FA) and account recovery processes.
When users attempt to log in or perform a sensitive action, the system requires a one-time verification code sent to the user's mobile number. Once the code has been entered correctly, access is granted. Almost everyone has access to a mobile phone, making SMS-based authentication widely accessible. It's relatively easy for users to understand and use. Setting up SMS-based 2FA is typically straightforward. Users don't need specialized hardware like tokens or authentication apps. In addition to other types of two-factor authentication, SMS authentication is an extra layer of protection for your assets as it is fast and does not need an internet connection to work.
How To Set Up Two-Factor Authentication on Cwallet
Cwallet allows you to protect your account with an extra layer of Authentication with Email Authentication, SMS Authentication, and Google Authentication.
To add your mobile number or email address for authentication, all you need to do is visit Cwallet, navigate to the Profile page, and locate “Security.” From there, you can set up and verify your email address and phone number, where codes will be sent for two-factor authentication.
You can also set up Google 2FA with these simple steps, and once that is done, you will require a time-based or key-based code to release funds from your account, and in the case of a compromise, your funds may be protected.
Cwallet also has additional security features, including infusing Touch ID and Face ID as biometric options, as well as, screen auto-lock settings to derail possible attacks on your account.
Lastly, Cwallet uses Cloud-based encryption via Multi-Party Cloud Computing (MPCC) technology to secure your information. Hence, you can be sure that despite using a custodial wallet option, your private information will not be compromised.
Indeed, Google Authenticator is the more secure option, but it may be a tad difficult to use or recover if you lose your authentication device. On the other hand, SMS-based authentication is easy to use, set up, and recover, even if you lose your device; however, in the case of a stolen device, your account could be more easily compromised with SMS codes.
It is critical to emphasize that the choice between Google Authenticator and SMS-based authentication is not one-size-fits-all. Your choice should be based on your circumstances and preferences. So, If you value security and are ready to put in a little extra effort, Google Authenticator may be your best option. SMS-based authentication, on the other hand, may suffice if you prioritize simplicity and accessibility.
Above all, we urge you to prioritize security in your cryptocurrency operations. The safety of your crypto holdings largely depends on you. Because cryptocurrencies are unpredictable and decentralized, the security of your assets is strongly reliant on the strength of your authentication mechanisms and overall wallet security.