<Li> Using a mathematical algorithm where the new password is based on a challenge (e.g., a random number chosen by the authentication server or transaction details) and / or a counter . </Li> <P> There are also different ways to make the user aware of the next OTP to use . Some systems use special electronic security tokens that the user carries and that generate OTPs and show them using a small display . Other systems consist of software that runs on the user's mobile phone . Yet other systems generate OTPs on the server - side and send them to the user using an out - of - band channel such as SMS messaging . Finally, in some systems, OTPs are printed on paper that the user is required to carry . </P> <P> A time - synchronized OTP is usually related to a piece of hardware called a security token (e.g., each user is given a personal token that generates a one - time password). It might look like a small calculator or a keychain charm, with an LCD that shows a number that changes occasionally . Inside the token is an accurate clock that has been synchronized with the clock on the proprietary authentication server . On these OTP systems, time is an important part of the password algorithm, since the generation of new passwords is based on the current time rather than, or in addition to, the previous password or a secret key . This token may be a proprietary device, or a mobile phone or similar mobile device which runs software that is proprietary, freeware, or open - source . An example of time - synchronized OTP standard is Time - based One - time Password Algorithm (TOTP). </P> <P> All of the methods of delivering the OTP below may use time - synchronization instead of algorithms . </P>

What type of one-time password (otp) changes after a set time period