Microsoft 2-factor authentication: application passwords (part II)

[continued from part I]

The bane of any second-factor roll-out is compatibility with existing software. Sometimes it is a short-sighted protocol to blame, naively assuming that authentication equals sending along username/password. Other times the protocol is fine but some popular software implementing the protocol took a shortcut and only provided for the password option. Either way, the only way to appease these legacy scenarios is by providing them something resembling a “password,” which is to say a constant secret.

  • At first it is  tempting to make this secret vary over time, for example by appending the OTP. In general that is not an, because the value is meant to be collected once from the user,  but stored and used multiple times over time. For example, email clients on mobile devices are notorious for implementing IMAP with passwords. If the password changed over time, the user would have to reenter it each time they want to download mail on their phone
  • At the same time, this new credential can not be same as the existing user password. Otherwise it would completely defeat the point of two-factor authentication. In a well-designed scheme, knowing the password alone does not grant access to user data without the second factor.

The work-around MSFT picked follows existing practice:  application passwords. These are randomly generated strings that can substitute for a “password” whenever a” legacy” application that is not aware of 2-factor authentication insists on collecting a password. (Legacy in quotes, because out of the gate that will include all client applications and hardware such as XBox console.) There are some interesting twists about AP usage.

Authenticator and application passwords

  • They are generated on demand, and intended to be copied into the necessary application at that time. Similar to the Google design, it is not possible to go back and look at an application password  generated in the past.
  • One difference is that MSFT does not show an inventory of existing APs, allow users to assign nicknames or track the date of generation.
  • Ergo: it is not possible to revoke APs individually either. Instead there is a single option to revoke all APs at the same time. This can be quite disruptive. For example dealing with a lost device means not only revoking the AP for that device but also breaking every other application (still in user possession) relying on APs.

Remove all application passwords

  • APs survive password changes. This has some interesting security implications. AP can function as a backdoor to the account. If an attacker is able to generate an AP, they can persist access even after legitimate user change the password. Corollary: users recovering from an account hijacking need to also check for rogue APs  to guarantee they have reverted to a safe state.

In some ways “application password” is a misnomer, because the credential is not scoped to any particular application. Users do not create one AP unique to access, and a different AP dedicated to SkyDrive that is not interchangeable with the first. Therein lies one of the great ironies: for all this effort expended on two-factor authentication, AP is a static, long-lived secret that grants full access to user data– in other words, a glorified password. That said, it has an improved risk profile compared to vanilla password. Because they are not chosen by the user, they are not predictable or easily guessed by dictionary attacks. Because they are only displayed once and not memorable strings, they are difficult to phish. (A creative website can convince users to generate a brand-new AP and paste it, but that is a lot more effort than asking  for their everyday password.)

There is one more challenge specific to two-factor authentication systems that are used for logging into devices, such as desktops or laptops. Such schemes need to operate offline, when the device has no network connectivity. MSFT design has to confront this problem: Windows 8 has support for signing into the operating system with online accounts, but OTP codes can only be verified by the cloud service. (In principle TOTP could be verified by sharing seed keys with trusted devices ahead of time, but such proliferation of secret material would greatly weaken security.) Considering that Windows 8 logon continues to work even for accounts with 2-factor enabled, the implications of this will be taken up in a future post.


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