Offering reliable and safe access to cloud-based applications is an ongoing problem for organizations across all industries. Therefore, providing users with simple and dependable security measures is vital for securing sensitive company data and user info. But with many two-factor authentication (2FA) options, which one is suitable for you–OTP, TOTP, or HOTP?

Today, it’s essential for companies to offer 2FA (Two-factor authentication) to their users to protect their activities on the internet. There’re multiple types of 2FA out there. In this post, we’ll discuss the three most common methods: one-time password (OTP), a time-based one-time password (TOTP), and a hash-based one-time password (HOTP).

We’ll discuss each, give out their differences, their pros and cons, as well as how they work. Read on to find out more!

Defining Terms

What is 2FA?

Simply put, 2FA (Two-factor authentication) is an additional step incorporated in the sign-in process, such as a fingerprint scan or a code sent to your phone. The extra step helps to verify your identity and deter cybercriminals from gaining access to your private info.

Two-factor authentication is a form of multiple-factor authentication that provides an additional security level that cybercriminals cannot effortlessly access. The reason for this is that hackers will require more than just your sign-in credentials (username and password) to gain access.

What is MFA?

MFA (multiple-factor authentication) is an authentication technique that demands users to give two or more factors to access software, an online account, or even a VPN (Virtual Private Network). Instead of asking for login credentials only, MFA demands one or more extra verification factors limiting the probability of a successful cyber-attack. Check out our blog post here as we discuss MFA in detail.

Types of Two-Factor Authentication (2FA)

Now that we’ve defined what 2FA is and how it works, below are three methods of two-factor authentication.

One-time Password

OTP or a one-time password is a unique code sent to a user via phone or email. Typically, it comes with four to six characters and users need to input the characters to authenticate their identity.

Generally, organizations use a one-time password as a complementary factor in MFA processes, but businesses can also use it to authenticate users.

Time-based One-time Password (TOTP)

TOTP (time-based one-time password) is merely a one-time password based on time. OTPs usually base their functioning on the time sequences known as timesteps. In most cases, a timestep duration lasts for roughly 30 to 180 seconds, but it’s possible to customize this time duration. Well, this means that the OTP code is invalid if used after the stipulated time’s elapse.

We’ve discussed in detail how TOTP works in this blog post.

Hash-based One-time Password (HOTP)

HOTP (hash-based one-time password) is an OTP based on events. Basically, HOTP comes with a token generation that’s only known to the server and the user. Since the OTP is sent to the user and founded on a hash algorithm, the OTP gets the name ‘hash-based one-time passwords.’

Why Use 2FA/MFA?

Two-factor authentication or MFA can assist in deterring some of the leading types of cyberattacks, such as:

Spear phishing – the act of sending emails to precise and well-researched targets while alleging to be a trustworthy sender.
Phishing – a technique of attempting to gather personal info via deceptive websites and emails.
Keyloggers – it’s a type of software or malware made to record keystrokes that users make.
Brute force & reverse brute force attacks – it’s a type of hack that depends on guessing potential combinations of a targeted password until discovering the right password.
Credential stuffing – it’s the automated use of collected credentials to gain deceitful access to user accounts.
MITM (Man-in-the-middle) attacks – it’s the act when an attacker or intruder interrupts communications between two or more parties either to adjust or secretly eavesdrop traffic between the parties.

Top Industries that need Two-Factor Authentication

2FA is a fantastic tool for businesses to protect themselves and their consumers. The extra security makes it easy to prevent over 80% of the security breaches. Here are the industries that benefit most from Two-factor authentication.


Two-factor authentication makes online accounts much more secure means the internet industry is a good home for Two-factor authentication. For internet companies, such as Facebook, Instagram and Google, two-factor authentication has incredible value. Indeed, users want to secure their email and social accounts.


For all users, securing financial data is a substantial concern. With this, it would be wise for banks to provide extra security since they’re a top target.


When it comes to the eCommerce industry, two-factor authentication solves credit card fraud problems.

Government Organizations

Cybercriminals always target government organizations. With a 2FA process in place, it will be easy to prevent both cyber and physical attacks in government bodies.


Transmitting electronic data can pose a threat to both providers and patients. Two-factor authentication in the health industry ensures patients’ data stays private and confidential.

How 2FA Works

It is crucial to have know-how regarding factors to understand how two-factor authentication works. Ideally, you’ll need to have a 2FA factor to gain access to an account. Here’s a breakdown of what to expect:

Knowledge – the factors need you to know something, such as security questions, a code sent to your phone or even a particular keystroke.
Biology – the system gives users access to proving their identity via biological makers, such as voice or fingerprint.
Possession – a user needs to have a physical factor, such as a USB drive or debit card and then insert it into a device to gain access.

Never compromise security
for convenience, choose both!

Advantages of 2FA

  • It adds an extra security layer
  • It adds variation
  • It’s quite cost-effective
  • It remembers users’ accounts
  • Lightweight

Disadvantages of 2FA

  • Increased sign-in time
  • Integration cost
  • It’s not foolproof
  • Downtime can be disruptive

How OTP Works

If activated, OTP is sent to users that need to sign into their digital accounts. Merely put, it assists in authenticating users’ identity and it needs to be used within a stipulated time. Upon OTPs allowing users to log into their accounts, their validity vanishes. Since it’s only usable once, an OTP is safer than a static password.


  • It’s secure from replay attacks
  • It lets you keep your emails secure
  • It’s convenient to use


  • It may get out of sync
  • You may get locked out of your account
  • It’s relatively expensive for the providers

TOTP VS HOTP: What is the Difference?

Since it incorporates additional factors to meet the algorithm security requirements, TOTP is regarded as a newer version of HOTP. The fact that time-based one-time password is valid within a specific period means it offers more security than HOTP. Here, incorporating a new factor that needs to be met enhances the code’s security.

Additionally, sending a one-time password comes down to other external factors, like internet connectivity for the emails and broadband coverage for calls and SMS. If users lack any of these, the one-time code will not arrive at the user’s device and they’ll be unable to input the code to authenticate their identity. In such a scenario, users will have to request another code. Besides, even if users meet all the criteria, failure to use the OTP fast will be useless.

When it comes to this, HOTPs perhaps provide friendlier ways of authenticating users because timesteps don’t restrict them. Instead, users can enter their codes whenever they deem it fit. Unluckily, compared to time-based OTPs, HOTPs are less secure.

Final Words

Irrespective of the kind of One-time based password you use, selecting a one-time based password generator is a much secure way to use MFA. Today, hackers have invented techniques to interrupt the OTPs code, whether via SIM card fraud or other hacks. Whatever the case, the time for implementing two-factor authentication in any industry is now!

If you’ve problems deploying MFA in your company, Teamstack is the team to get in touch with. Teamstack is unmatched in multiple-factor authentication as it supports popular methods, such as TOTP (Google Authenticator), WebAuthn (Windows Hellow on Win, Touchld on Mac and FIDO2), SMS codes, etc.