One-Time Password

A one-time password (OTP), also known as one-time PIN or dynamic password, is a password that is valid for only one login session or transaction, on a computer system or other digital device. OTPs avoid a number of shortcomings that are associated with traditional (static) password-based authentication; a number of implementations also incorporate two-factor authentication by ensuring that the one-time password requires access to something a person has (such as a small keyring fob device with the OTP calculator built into it, or a smartcard or specific cellphone) as well as something a person knows (such as a PIN).

OTP generation algorithms typically make use of pseudorandomness or randomness, making prediction of successor OTPs by an attacker difficult, and also cryptographic hash functions, which can be used to derive a value but are hard to reverse and therefore difficult for an attacker to obtain the data that was used for the hash. This is necessary because otherwise it would be easy to predict future OTPs by observing previous ones.

OTPs have been discussed as a possible replacement for, as well as enhancer to, traditional passwords. On the downside, OTPs can be intercepted or rerouted, and hard tokens can get lost, damaged, or stolen. Many systems that use OTPs do not implement them in a secure way, and attackers can still learn the password through phishing attacks to impersonate the authorized user.

Characteristics

The most important advantage that is addressed by OTPs is that, in contrast to static passwords, they are not vulnerable to replay attacks.

This means that a potential intruder who manages to record an OTP that was already used to log into a service or to conduct a transaction will not be able to abuse it, since it will no longer be valid.

A second major advantage is that a user who uses the same (or similar) password for multiple systems, is not made vulnerable on all of them, if the password for one of these is gained by an attacker. A number of OTP systems also aim to ensure that a session cannot easily be intercepted or impersonated without knowledge of unpredictable data created during the previous session, thus reducing the attack surface further.

There are also different ways to make the user aware of the next OTP to use. Some systems use special electronic security tokens that the user carries and that generate OTPs and show them using a small display. Other systems consist of software that runs on the user’s mobile phone. Yet other systems generate OTPs on the server-side and send them to the user using an out-of-band channel such as SMS messaging. Finally, in some systems, OTPs are printed on paper that the user is required to carry.

How are OTPs generated?

Concrete OTP algorithms vary greatly in their details. Various approaches for the generation of OTPs include:

• Based on time-synchronization between the authentication server and the client providing the password (OTPs are valid only for a short period of time)
• Using a mathematical algorithm to generate a new password based on the previous password (OTPs are effectively a chain and must be used in a predefined order)
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• Using a mathematical algorithm where the new password is based on a challenge (e.g., a random number chosen by the authentication server or transaction details) and/or a counter.

Time-synchronized

A time-synchronized OTP is usually related to a piece of hardware called a security token (e.g., each user is given a personal token that generates a one-time password). It might look like a small calculator or a keychain charm, with an LCD that shows a number that changes occasionally.

Inside the token is an accurate clock that has been synchronized with the clock on the proprietary authentication server. On these OTP systems, time is an important part of the password algorithm, since the generation of new passwords is based on the current time rather than, or in addition to, the previous password or a secret key.

This token may be a proprietary device, or a mobile phone or similar mobile device which runs software that is proprietary, freeware, or open-source. An example of time-synchronized OTP standard is Time-based One-Time Password (TOTP). Some applications can be used to keep time-synchronized OTP, like Google Authenticator or a password manager.

Challenge-response

The use of challenge-response one-time passwords requires a user to provide a response to a challenge. For example, this can be done by inputting the value that the token has generated into the token itself.

To avoid duplicates, an additional counter is usually involved, so if one happens to get the same challenge twice, this still results in different one-time passwords.

However, the computation does not usually involve the previous one-time password; that is, usually this or another algorithm is used, rather than using both algorithms.

Hash chains

Each new OTP may be created from the past OTPs used.

An intruder who happens to see a one-time password may have access for one time period or login, but it becomes useless once that period expires.

The S/KEY one-time password system and its derivative OTP are based on Lamport’s scheme.