The term OTP, or One-Time Password represents a unique password that is valid for only one login session or transaction. It is a powerful tool in the fight against cybercrime, providing an additional layer of security that can protect sensitive data and systems from unauthorized access.
OTP systems are designed to counteract the risks associated with fixed (static) passwords. The primary advantage of an OTP is that it significantly reduces the risk of a potential intruder intercepting the reusable password. As the name suggests, an OTP is not vulnerable to replay attacks, because it is not valid for more than one login session or transaction.
How OTP works
One-Time Passwords are generated using algorithms that produce a unique set of credentials for each login attempt. These algorithms can be time-based, counter-based, or use a combination of both. The generated OTP is then sent to the user via a secure channel, such as a text message, email, or a dedicated authentication app.
The user enters the OTP into the login interface, and the system verifies the password. If the OTP matches the one generated by the system, the user is granted access. If not, the login attempt is rejected. The OTP is then discarded and cannot be used again, even if it is intercepted during transmission.
Time-based OTPs
Time-based OTPs (TOTPs) are generated by applying a cryptographic algorithm to the current time. The algorithm uses the time as a seed to generate a unique password. The time is usually divided into intervals, such as 30 or 60 seconds, and a new OTP is generated for each interval.
The advantage of TOTPs is that they do not require a network connection to generate or validate the OTP. However, the device generating the OTP and the server validating it must have synchronized clocks. If the clocks are not synchronized, the OTPs generated will not match the ones expected by the server, and the login attempts will fail.
Counter-based OTPs
Counter-based OTPs (HOTPs) are generated by applying a cryptographic algorithm to a counter value. The counter is incremented each time an OTP is generated. The server keeps track of the counter and expects the next OTP to be based on the next counter value.
The advantage of HOTPs is that they do not require clock synchronization. However, they do require the server and the device generating the OTP to maintain consistent counter values. If the counters become out of sync, the OTPs generated will not match the ones expected by the server, and the login attempts will fail.
OTP delivery methods
Once an OTP is generated, it must be delivered to the user in a secure manner. There are several common methods for delivering OTPs, each with its own advantages and disadvantages.
Common delivery methods include SMS text messages, emails, dedicated authentication apps, and hardware tokens. The choice of delivery method depends on the specific requirements of the system and the user's preferences.
SMS and email
SMS and email are the most common delivery methods for OTPs. They are convenient for the user, as they do not require any additional hardware or software. However, they are also the most vulnerable to interception. If an attacker can gain access to the user's email account or intercept their SMS messages, they can steal the OTP and gain unauthorized access to the system.
Despite these risks, SMS and email are still widely used due to their convenience. To mitigate the risks, additional security measures are often implemented, such as encryption of the OTP and the use of secure email protocols.
Authentication apps and hardware tokens
Authentication apps and hardware tokens are more secure delivery methods for OTPs. They generate the OTP on the user's device, eliminating the risk of interception during transmission. However, they require the user to have a compatible device and to install and maintain the app or token.
Authentication apps, such as Google Authenticator and Authy, generate OTPs using TOTP or HOTP algorithms. The OTP is displayed on the device's screen and entered by the user during login. Hardware tokens work in a similar way, but the OTP is generated by a dedicated device, often in the form of a key fob or card.
Advantages and disadvantages of OTPs
OTPs offer several advantages over static passwords. They are resistant to replay attacks, as they are valid for only one login session or transaction. They also provide an additional layer of security, as even if the user's primary password is compromised, an attacker would still need the OTP to gain access.
However, OTPs also have some disadvantages. They require more effort from the user, as they must receive and enter the OTP during each login. They also require additional infrastructure to generate and deliver the OTPs. Furthermore, if the OTP is lost or intercepted, the user may be locked out of the system until a new OTP can be generated and delivered.
Advantages
One of the main advantages of OTPs is their resistance to replay attacks. Since each OTP is valid for only one login session or transaction, even if an attacker intercepts the OTP, they cannot use it to gain unauthorized access to the system.
OTPs also provide an additional layer of security. Even if the user's primary password is compromised, an attacker would still need the OTP to gain access. This makes OTPs an effective tool for protecting sensitive data and systems.
Disadvantages
One of the main disadvantages of OTPs is the additional effort required from the user. The user must receive and enter the OTP during each login, which can be inconvenient, especially if the user logs in frequently.
OTPs also require additional infrastructure to generate and deliver the OTPs. This can increase the complexity and cost of the system. Furthermore, if the OTP is lost or intercepted, the user may be locked out of the system until a new OTP can be generated and delivered.
Conclusion
In conclusion, OTPs are a powerful tool in the fight against cybercrime. They provide an additional layer of security that can protect sensitive data and systems from unauthorized access. While they do have some disadvantages, the benefits they offer make them an essential component of any robust cybersecurity strategy.
As cyber threats continue to evolve, the importance of OTPs is likely to increase. By understanding how OTPs work and how to use them effectively, you can significantly enhance the security of your systems and data.
This post has been updated on 17-11-2023 by Sofie Meyer.
About the author
Sofie Meyer is a copywriter and phishing aficionado here at Moxso. She has a master´s degree in Danish and a great interest in cybercrime, which resulted in a master thesis project on phishing.