Definition
One-Time Password
A one-time password (OTP) is a password that is valid for only a single authentication session or transaction. After use it is invalidated and cannot be reused.
One-time passwords mitigate the risk of replay attacks and reduce the impact of credential theft, since a captured password is useless for subsequent sessions.
Implementations
The user and the server compute the password on the fly using a cryptographic algorithm and a shared secret. Typically time-based.
A printed list of precomputed one-time passwords communicated over a secure channel. Each entry is used once and then invalidated.