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I have two-factor authentication enabled on my Google account, and I have this app on my phone which generates a number I have to type when I'm logging in to Google-Mail.

But I don't understand how this number is validated on Google's side. My bank has a similar approach: they gave me this little gadget which also generates numbers.

How do such “authenticator number generators” work?

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Here's a starting place for some research: Time-based One-time Password Algorithm, an extension of HOTP. What level of familiarity do you have with cryptography? That'll largely determine how detailed potential answers need to be. –  Reid Dec 3 '13 at 5:26
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up vote 2 down vote accepted

Google (and other companies) have decided to enable one-time passwords for their 2-factor authentication as a step to improve password security. Here is the webpage that explains what Google is doing in more detail (including source code): https://code.google.com/p/google-authenticator/

In a nutshell, they implement two IETF RFCs, namely RFC 6238 and RFC 4226. Have a look at these two specifications; they contain all the details. I was the shepherd for RFC 6238.

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