API key is a useful tool that helps users to access cryptocurrency account and make transactions flexibly. The following article will provide detailed information and how to use API keys effectively.
What is API?
API (Application Programming Interface) is a programming interface that allows the system of applications and software to interact with each other. Apps have access to features or other operating systems, apps, or services.
API controls how programs work and the data formats. API is commonly used on IoT (Internet-of-Things) websites and applications to collect and process data or allow users to enter information.
In the cryptocurrency market, API allows investors to access accounts to make trades without logging into the exchange. With the API, traders can use intermediary services from third-party applications to trade, hold data on trading accounts, manage portfolios and implement various trading strategies.
What is API key?
API key is a key that grants permission for software or applications to access, identify, and work with each other through an internet connection.
In the cryptocurrency sector, API key allows authenticating users and identifying accounts that are automatically accessible.
API key includes private key and public key. Private key is used to request access to the trading account, after that the exchange grants permission and performs operations supported by API key.
API key access
There are 3 levels of API key access that users can set up on their trading account:
- Read Info/General: Third-party applications using API key can only view the information displayed on the trading account: balance, transaction history,… All of these operations are read-only, and the API key cannot make any changes to the user account. This is a safe option, even if the API key is stolen or lost, hackers cannot make transactions or transfer coins/tokens in the account. This access is common in portfolio trackers and cryptocurrency tax software systems.
- Enable Trading/Trade: Third-party applications can automatically process transactions, build portfolios, open positions, and close orders,… Trading rights usually apply in cases where automated bots execute trades quickly.
- Enable Withdrawals/Withdraw: The API key is granted the right to withdraw funds from a trading account to another wallet address without the user’s approval or censorship. When the API key is attacked, users will deal with the risk of losing all assets.
Notes when using API key in cryptocurrency
Where should API key be stored?
After creating API key, you will be provided with a private key and a public key. To ensure security, the exchange will automatically hide private key after 30 minutes.
Therefore, you need to back up API key on file and set password to access to this file, and store it carefully on USB, hard disk drive or google drive,…
Hackers can not attack API key if they only have public key. However, if you forget or lose their private key, you will no longer be able to access and retrieve it. Therefore, you have to create a new API key to continue using it.
When should API key be deleted?
Whenever you detect or suspect that API key is attacked, you should delete API key immediately. At that time, you need to access the trading account, select API management and press the delete button.
How to use API key to trade coins safely?
- Be careful about API key access: Users should only set access to data or transaction and should not grant permission to transfer funds. In the case of enabling withdrawal, users should install google authenticator to secure account.
- Choose highly secure exchanges that offer good support. You can refer to and consider reputable exchanges in the following article of Ecoinomic.io: Top most prestigious coin exchanges in 2022
- Consider the safety of the third application’s data storage.
You can create API key in your Binance account so that 3rd-party applications can access your Binance account, which includes: portfolio management, placing buy and sell orders, auto trading bots,… helps you trade or invest better.
In the above article, Ecoinomic.io has given you an overview of what an API key is, its security, access rights, and how to use API key safely. You can read more information in the Ecoinomic crypto knowledge or guide for newbies here. If you have any question, please leave a comment below, Ecoinomic is willing to support you!