What Is Two-Factor Authentication (2FA)?

Cybersecurity is more crucial than ever as more and more people and organisations conduct business online and store sensitive data. Passwords offer a minimal degree of security against unauthorised access to accounts, but they are frequently weak and easily cracked. Hackers commonly use phishing schemes and data breaches to take advantage of password weaknesses.

This is where two-factor authentication, or 2FA, plays a critical role. 2FA adds an extra layer of security that helps prevent unauthorised logins even if a password is stolen in a breach by combining something you know—your password—with something you have—a second verifying factor.

Many major tech companies and websites now support 2FA to strengthen account security for their users. However, conventional 2FA techniques may present new difficulties for companies and groups that share accounts and resources. Device-dependent solutions in particular are problematic if authentication tokens are reliant on individuals' personal phones or hardware authenticators.

This article will provide an overview of two-factor authentication and explain how it improves cybersecurity. We will also look at typical 2FA implementation strategies and how businesses can benefit from 2FA without running the risk of negative outcomes for common use cases. The objective is to improve comprehension of this crucial authentication idea and the tactics for realistic, efficient 2FA for both individuals and organisations.

What is 2FA?

Two-factor authentication, commonly abbreviated as 2FA, is an identity verification method that requires two separate components to verify a user's claimed identity. The two factors involve:

  1. Something you know: Typically a password, PIN, or pattern that only the user knows. This establishes the first criteria for authentication.

  2. Something you have: A secondary verification factor in the user's possession, such as a physical security token/key, one-time passcode from an authenticator app, or a text message. This second factor confirms the user also has the authenticated device.

By combining these two factors, 2FA strengthens security protections beyond just a single password. The authenticated phone, key, or other physical device that generates the secondary codes must be in your possession to access your account, even if your password was compromised through phishing or another data breach.

This significantly increases the difficulty for hackers to access a user's account without authorization. Even if hackers obtain a user's credentials through dishonest means, 2FA successfully stops password-only login attempts and stops account takeover.

Why use 2FA?

Although passwords are a common first line of defence, when used alone, they pose a risk to authentication due to their inherent weaknesses. Some of the key downsides of password-only protection include:

  • Risk of Breaches and Leaks: Major data breaches at large companies routinely expose millions of username and password combinations. Hackers also deploy phishing scams to steal login credentials.

  • Weak and Reused Passwords: Many users create insecure passwords that are easy to guess or crack. Over 23% of people reuse the same password across multiple sites.

  • Credential Stuffing Attacks: Cybercriminals leverage leaked login credentials from one site to systematically attempt to access thousands of other websites.

  • Human Error: People tend to lose passwords over time or accidentally share them publicly. Forgotten passwords then require account recovery processes.

The statistics demonstrate these risks. According to the Identity Theft Resource Centre, there were over 1,800 data breaches in 2021, exposing over 370 million records. 2FA can help counter these threats. By adding an extra layer of verification beyond just a password, 2FA significantly raises the bar for unauthorised access. It makes phished passwords and leaked credentials alone insufficient for account takeover. This extra layer of identity assurance helps protect accounts from account takeover when other authentication factors are compromised.

What are the common 2FA methods?

Multiple methods can be used as the secondary authentication factor for 2FA implementations:

  • SMS Codes: One of the most common forms, SMS codes are texted to the user's registered phone number. Correctly inputting the single-use code verifies device possession.

  • Authenticator Apps: Popular apps like Google, Microsoft, and Daito Authenticator generate time-based one-time passwords (TOTP) that sync to user devices. The current TOTP acts as the dynamic code.

  • Security Keys: Physical USB or Bluetooth devices from vendors like Yubico store cryptographic credentials. Successful authentication via the key proves physical possession of the website.

In all cases, the user is prompted on login attempts to input the single-use or time-based code in addition to their password.

SMS codes provide a simple solution but rely on mobile device access. Authenticator apps generate TOTPs independent of carrier networks but require compatible devices. Security keys offer the strongest protection and don't expose codes, but physical devices must be carried.

Daito 2FA Mobile

When should I use 2FA?

2FA should be enabled for any accounts that process or store important information. Specifically:

  • High Value/Risk Accounts - Primary email, banking portals, investment/trading accounts, and cryptocurrency wallets. Unauthorised access to these could lead to significant damages.

  • Shared Work/Team Accounts - Organisations often need to share access across departments or locations. With traditional 2FA methods, if someone leaves the company, it can be difficult to adjust permissions. Services like Daito provide a web-based solution for centralised, seamless 2FA management of shared work accounts without relying on individual devices.

  • Any account with sensitive Info - Usernames, login credentials, payment information, health records, confidential documents - basically any site or service holding sensitive data merits the security of 2FA. Even low-profile accounts could be valuable targets for credential stuffing.

Given the increasing number of data breaches and security incidents, experts recommend treating 2FA activation as the new minimum standard of care rather than as an optional precaution limited to high-risk scenarios. When implemented correctly, 2FA creates an effective additional hurdle against would-be intruders without major disruption for authorised users.

Centralised vs. decentralised 2FA?

Traditional 2FA methods take a decentralised approach by tying authentication tokens directly to individual user devices. This has some limitations compared to centralised, service-based models.

Device-based implementations face challenges when access needs to be shared, such as for team or business accounts. It can be difficult to transfer control without the actual hardware token if someone leaves the company. Reliance on particular phones or authenticator apps can lead to problems if devices are replaced, lost, or stolen.

In contrast, centralised web SSO (single sign-on) services offer 2FA at the account level rather than the device level. Authentication is managed through any browser rather than dedicated authenticator apps.

This allows simple, secure sharing of 2FA access across organisations through role-based permissions. Teams can grant colleagues secure access to protected accounts without the need to distribute physical hardware. If an employee leaves, administrators can easily revoke all associated 2FA credentials from a centralised dashboard.

In today's threat landscape, defined by frequent data breaches and credential theft, two-factor authentication has become a critical layer of online account protection. When enabled alongside strong passwords, 2FA placement is a major roadblock in the way of would-be hackers and fraudsters. When compared to decentralised device-based models, 2FA implemented through a centralised web service offers simplified management for both personal and shared enterprise use cases. One of the most important things people and organisations can do to improve their online security posture is to make multi-factor authentication a standard procedure. This can be done with built-in 2FA options, standalone authenticator apps, or specialised team solutions like Daito. When configured correctly, it adds convenience and peace of mind against growing cyber risks.