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In this article, we will discuss what is meant by a one-time password or OTP? OTP stands for One Time Password, a one-time pin or password. It is a password that can only be used once. That is, a one-time password is a password that is valid only in one login session or transaction in a computer system or other digital devices. OTPs avoid several shortcomings associated with traditional password-based authentication.

How does a one-time password work?

The user’s OTP application and the authentication server rely on shared secrets in OTP-based authentication methods. One-time key values ​​are generated using the Hashed Message Authentication Code (HMAC) algorithm and a moving factor such as time-based information (TOTP) or an event counter (HOTP). One-time password values ​​have a minute or second markers for added security. The one-time password can be delivered to the user through multiple channels, including SMS-based text messaging, email, or a dedicated app.

Security experts have long worried that SMS message spoofing and man-in-the-middle (MITM) attacks could be used to break 2FA systems that rely on one-time passwords. However, the US National Institute of Standards and Technology (NIST) announced that it plans to use SMS for 2FA and one-time passwords because the method is vulnerable to a suite of attacks. As a result, companies considering using one-time passwords should use other delivery methods besides SMS.

Advantages of using a one-time password

One of the most important advantages of using a one-time password, unlike static passwords, is its high security against data theft. Also, OTPs are not vulnerable to replay attacks, which means that an attacker can capture an OTP previously used for logging in to a service or making a transaction and will not be able to misuse it as it will no longer be valid.

The second important advantage is that a user with a static password can be used for several systems, which in this case is available to an attacker and does not become vulnerable to all of them. Several OTP systems also aim to ensure that a session cannot be easily intercepted or spoofed without knowledge of unpredictable data created the last time, thus reducing the attack surface. OTPs have been considered as a possible alternative to traditional passwords as well as their reinforcement. A one-time password is difficult for humans to use, requiring additional technology.

Disadvantages of using a one-time password

Using a one-time password is generally expensive because the hardware, token, or sending the codes using a phone or mobile phone costs a lot. However, using special software installed on the mobile phone to have a one-time password is less expensive than special hardware, but it is necessary to point out that sending a one-time password code is less secure than hardware. Therefore, the user should pay attention to the need and cost and choose one of the most appropriate methods of using a one-time password.

Another disadvantage of using a one-time password is that the proposed methods can be problematic. For example, if you don’t have access to a mobile phone or the required hardware, you can’t log in to the system, so to solve this problem, you must use alternative emergency methods to log in to the system.
How to generate and distribute a one-time password

Key logger activity can also be stopped by using a one-time password. In this case, the key logger that stores the passwords and sends them to its manufacturer becomes ineffective because the password stored by the key logger will only be valid for the first time and is ineffective for the next time. Algorithms for generating one-time passwords usually use pseudo-random or random patterns or Hash functions, which are easily generated.

One-time password generation methods

One-time password generation methods include the following:

• The method is based on time synchronization between the authentication server and the client to provide the password (one-time passwords are only valid for a short time)
  Using a mathematical algorithm to generate a new password based on a previous password (one-time passwords are effectively a chain and must be used in a predefined order.)
• Using a mathematical algorithm where the new password is based on a challenge (for example, a random number chosen by the authentication server or transaction details, or a counter)

There are also different methods for generating a one-time password that informs the user when the next OTP will be used. Some systems use electronic security tokens carried by the user, generate a one-time password, and display them on a small screen. Other systems include software that can be run on the user’s mobile phone. However, other systems generate OTPs on the server-side and send them to the user using an out-of-band channel such as SMS messaging. Or in some systems, OTPs are printed on paper that the user must carry with him.

Ways to use one-time passwords by users

In general, among the ways of using a one-time password by users, the following can be mentioned:

• Sending the password via SMS to the user’s mobile phone
• Registering the user’s mobile number in the system and checking its validity
• Generating multiple one-time passwords for a given period (for example, a month), one of which can be used at a time.
• Using hardware independent of the user’s computer and the Internet (large commercial companies use this method)

How to use a one-time password

To activate and use the one-time password, you must go to one of the relevant bank branches and activate your one-time password. Then, you can receive a one-time password via SMS by installing the latest version of Mobile Bank software or registering a mobile number. You can use Mobile Bank software or one of the downloadable software. The bank activates a user account with its profile on its special mobile software. When a person wants to make an online purchase or transfer money online, he must open this application on his phone and receive a code that will be valid only for this transaction.

One-time password activation methods

The one-time password activation methods are as follows:

• Using banking software
• Phone SMS
• Using the USSD command code

It is hoped that reading this article about one-time passwords or Time Passwords (OTP) will be of interest to you, dear readers, and will be useful.

Frequently Asked Questions

What is the most important advantage of using a one-time password over static passwords?

The most important advantage of using a one-time password over static passwords is its high security against data theft and the invulnerability of the one-time password against repeated attacks.

What are the advantages of a one-time password over static passwords?

Among the advantages of using a one-time password over static passwords, the following can be mentioned:

• It is very high security against protecting and preventing information theft
• The user can use a static password for several systems, which in this case will be available to the attacker and will not be vulnerable to all of them. However, using a one-time password can ensure a session without the knowledge of the data. Unpredictable ones created in the past are easily intercepted or not spoofed, thus reducing the attack surface.

Are the values ​​of one-time passwords generated using algorithms?

One-time key values ​​can be generated using the Hashed Message Authentication Code (HMAC) algorithm and a moving factor such as time-based information (TOTP) or an event counter (HOTP).