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One-Time Password (OTP)

Definition - What does One-Time Password (OTP) mean?

A one-time password (OTP) is type of password that is valid for only one use.

It is a secure way to provide access to an application or perform a transaction only one time. The password becomes invalid after it has been used and cannot be used again.

Techopedia explains One-Time Password (OTP)

A OTP is a security technique that provides protection against various password-based attacks, specifically password sniffing and replay attacks.

It provides more enhanced protection than static passwords, which remain the same for multiple login sessions. OTP works through randomness algorithms that generate a new and random password each time they are used.

The algorithm always uses random characters and symbols to create a password so that a hacker/cracker cannot guess the future password. A OTP uses several techniques to create a password, including:

  • Time-Synchronization: The password is valid for only a short period of time.
  • Mathematical Algorithm: The password is generated using random numbers processed within an algorithm.

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