Multisig Wallets – Bringing Two-Factor Verification to Crypto Security

There’s a lot of buzz in the cryptocurrency space, and like any other technology, it’s not without its pitfalls. One such issue we see popping up is the need for more security in crypto wallets and exchanges. 

While there are many reasons for this, one particular problem is that most cryptocurrency users rely on single-signature wallets to store their coins. And thus, all their funds are at risk if someone were to gain access to their private key(s).

In this blog post, we’ll discuss how two-factor authentication can improve your crypto security and why you should be using an HD wallet over a simple address with no backup plan.

Wallets Are Central to the Cryptocurrency Movement

Wallets are the central part of the cryptocurrency movement. According to Grand View Research, the global crypto wallet market was worth $8.42 billion in 2022 and is projected to reach $10.27 billion in 2023. They’re where you store your crypto, send and receive it, and use it to pay for things. It’s also essential to make sure that your wallet is secure. That way, no one else can access or steal your funds.

There are many kinds of wallets – hardware wallets like Trezor or Ledger, mobile apps like TrustWallet, desktop software like Electrum, browser extensions like Metamask, and so on. The most important thing when looking at different types of wallets should be finding one that makes sense for how often you plan on using cryptocurrencies and what security features they offer.

The Problem With Standard Wallets

According to SonicWall, cryptojacking attacks increased by 19% in 2021, one of the most significant threats globally. Your cryptocurrency is stored on a single device when you use a standard wallet. It means that if someone were to hack into your computer or phone and steal all of your funds, they could also access any other connected wallets. If malware infects one of these devices, it could potentially steal all the information on its wallets.

For example, if we take Bitcoin as an example, let’s say you have your Bitcoin in an app called “Coinbase” on your phone because this is what most people do. Imagine someone hacks into Coinbase and steals $100 worth of BTC from you. But what happens next? Well, now they have access to those funds and any other funds in any other wallets connected with your account.

How Does the Two-Factor Verification Process Works?

According to Persona, 80% of cyber attacks can be prevented using 2FA. Two-factor verification is a security process that requires you to verify your identity with two different things, such as a device and a code. The device can be anything from a smartphone to an ATM card, but the most common method is sending an SMS or email containing a code to your phone number. 

This type of protection has been used in banking for years now. That’s why many banks require users who log into their accounts remotely through some form of two-factor authentication, like SMS verification codes sent via text message or email verification links sent via email.

How to Set up a Multisig Wallet?

Multisig wallets are a great way to add an extra layer of security to your crypto assets. A Casa multisig wallet is simply a cryptocurrency wallet that requires more than one signature from the holder for cryptocurrency transactions to be made. 

It means that even if someone gets access to one or two private keys associated with an account, they will only be able to move funds if they get at least one more keyholder’s signature. It makes it much harder for hackers who have stolen credentials through phishing or brute force attacks, where they try every possible combination until they find one that works.

With Two-Factor Verification, You Can Be More Secure Than Ever Before

When you have a cryptocurrency wallet, you can access all your funds. But this also means that if someone steals your password or private key and gets into your account, they can take all of those funds. However, with two-factor verification (2FA), you can be more secure than ever.

With 2FA enabled on an exchange or other service where you hold cryptocurrencies such as bitcoin or ether, if someone tries to log in without providing their second factor, typically either SMS verification or a code from Google Authenticator, they won’t be able to withdraw money from their account until they do so. 

It makes it much harder for hackers who steal credentials from one website with 2FA enabled to move those stolen funds around freely between exchanges without having access.

Conclusion

In conclusion, this article can give you a better understanding of multi-sig wallets and why they are so crucial for the future of cryptocurrency. While it may be difficult to understand at first glance, their benefits are clear: they allow users to control their funds without relying on trustless systems like exchanges or other third parties. 

In addition, multi-sig wallets can help protect against theft by requiring multiple keys before you can make any transactions. It means that even if one key is compromised somehow, another layer of security will still prevent them from accessing funds in your wallet.