Nov 25, 2018 · 3 min read

According to the U.S. Small-Business Administration, small businesses make up 99.7% of U.S. employer firms, 98% of firms exporting goods, 64% of net new private-sector jobs, 49.2% of private-sector employment, and 43% of high-tech employment! Small businesses are the lifeblood of the U.S. and global economy.

Because of this, small businesses are huge targets for hacking, security breaches, phishing, and theft. According to a recent report, about 58% victims of data breaches are categorized as small businesses, while the top two assets that are usually compromised are databases and Point of Sale (POS) terminals. Yet, very few small businesses use Multi-Factor Authentication to secure data, and none are using the power of the blockchain.

What is Multi-Factor Authentication (MFA)?

Multi-factor authentication (MFA) is a security enhancement that requires two or more types of verification. There are generally three recognized types of authentication factors:

Something You Know: A password or PIN

Something You Have: Physical objects such as a phone, USB, or hard drive

Something You Are: Biometrics, facial recognition, retina scan, etc.

Multi-factor authentication can be an important tool to decrease attacks. In this article, we examine, how powerful it can be, and how Hydro’s use of the blockchain is taking multi-factor authentication into the future.

Cyber Attacks and Fraud In Small Business

According to a report in USA Today:

  • Cyber attacks cost small businesses between $84,000 and $148,000
  • 60% of small businesses go out of business within six months of an attack
  • 90% of small business don’t use any data protection at all for company and customer information
  • Almost two-thirds of all cyberattacks are now directed at small business

Small businesses store not only their own critical data and information but also customer records (including possibly credit card, social security, and/or other numbers), vendor information, customer lists, passwords, and much, much more.

Small businesses estimate losses of $200,000 per year due to fraud (AFCE). Occupational fraud, which relates to crimes committed against the organization by its employees, managers, or executives is an even more severe problem for small businesses. They don’t have the resources to combat it, but as we will examine, MFA through blockchain can help.

Identity theft is not something that only impacts individuals. According to the IRS, small business identity theft is “a big business.” This is especially prevalent with business credit cards, since small business owners typically have more frequent transactions than individual consumers, allowing fraudsters to mask small purchases easily.

MFA Options

Even for the slim percentage of small businesses that use some sort of MFA, the two main solutions are poor. Let’s examine each, and their shortcomings:

Text & Email: This is the most commonly used practice for most companies, and by far the least secure. Here is a video that explains how easily they can be hacked:

Hardware tokens: These physical devices come in either a USB-like, card reader, or keychain form that generates a one time code when prompted. This option is very costly (nearly $275 at Walmart), and still lacks security. Someone can take the RSA token from your small business location and use it as their own, with very little you can do about it.

Blockchain & MFA

A blockchain is a decentralized, distributed and public digital ledger that is used to record transactions across many computers so that any involved record cannot be altered retroactively, without the alteration of all subsequent blocks.

Hydrogen has created the world’s first blockchain protected MFA system, called Hydro Raindrop. It is deployed via a secure mobile application, protected by pin, touch and face ID.

This proprietary system uses the power of a public ledger to provide protection. If you are a small business, you can now rely on thousands of computers, not just your own, to store and protect data and access.

If your website is built on top of Wordpress, Drupal, Joomla, or using an e-commerce shopping cart via Shopify or Magento, you can use the power of the blockchain and Hydro for MFA, 100% free. Here are all of the integrations available through the Hydro app.

To get started with Hydro Raindrop for MFA, use the integration guide below. Get setup in 1 hour or less!


The Global Financial Operating System


Written by


The Global Financial Operating System. Creator of #Atom and #Molecule #APIs. Founding dev on open-source #blockchain #Hydro. Made in #NYC! www.hydrogenplatform.



The Global Financial Operating System

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