How OTPs Are Generated and Distributed
OTP generation algorithms typically make use of pseudorandomness or randomness. This is necessary because otherwise it would be easy to predict future OTPs by observing previous ones. Concrete OTP algorithms vary greatly in their details. Various approaches for the generation of OTPs are listed below:
- 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).
- 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.
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.
Read more about this topic: One-time Password
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