9 Best Practices for API Authentication and Authorization

In the world of web services and microservices architecture, REST APIs have become ubiquitous.

However, with great power comes great responsibility, especially when it comes to security. REST API Authentication and Authorization form the backbone of API security, ensuring that only legitimate users can access your API and its resources and limiting their actions to only those they are authorized to perform.

In this comprehensive guide, we'll delve into the various REST API authentication methods in use today, along with best practices for implementation. We'll also explore the critical differences between authentication and authorization and provide you with the knowledge you need to secure your APIs effectively.

API Authentication And Authorization: A Brief Introduction

Authentication and authorization are often misconstrued and used interchangeably; however, they are two distinct processes and serve different roles in API security.

Authentication is the first line of defense in API security. REST API authentication methods (the ones we are going to discuss in detail in the coming sections) are used to identify and verify the authenticity of the entity (a user or a system) attempting to access an API and its resources. 

REST API Authorization, on the other hand, comes into the picture after the authentication process. It governs what an entity can access and what actions it can perform within an API once its access has been authenticated. 

Note: REST Authentication is "stateless," as in, it does not create a session for each interaction.  As a result, this process is not reliant on past session data, which makes the authentication process more secure, scalable, and easier to implement. 

Understanding Authentication vs. Authorization

Before we dive into specific methods, it's crucial to understand the distinction between authentication and authorization:

Authentication

• Definition: The process of verifying the identity of a user or system.
• Purpose: To ensure that the entity attempting to access the API is who they claim to be.
• Question it answers: "Who are you?"

Authorization

• Definition: The process of determining what actions an authenticated entity is allowed to perform.
• Purpose: To control access to resources and functionalities within the API.
• Question it answers: "What are you allowed to do?"

Remember: Authentication always precedes authorization. You must know who someone is before you can determine what they're allowed to do.

Nine Best Practices for API Authentication and Authorization

Let's explore the most common REST API authentication methods, their pros and cons, and best practices for implementation.

With the differences between REST API Authentication and authorization clarified, let's look at the most common REST API authentication methods in use today, along with the best practices to follow when implementing them.

1. Basic Authentication

Basic Authentication is the simplest of the REST API authentication methods in use today. It involves sending the username and password to the API provider that is encoded (in Base64) in the request header.  

While it is the simplest to implement, it is also the least secure of the lost as base64 can very easily be decoded. 

How it works

1. The client sends a request with an Authorization header containing the word "Basic" followed by a space and a base64-encoded string of "username:password".
2. The server decodes the string and verifies the credentials.

Pros

• Simple to implement
• Widely supported

Cons

• Less secure if not used with HTTPS
• Credentials sent with every request
• No built-in expiration mechanism

Best Practices When Using Basic Authentication

• Always use basic authentication in tandem with other security mechanisms like HTTPS and SSL. 
• Limit access to API requests via Basic Authentication to only necessary endpoints and resources.
• Enforce strong password policies when using basic authentication. 

2. OAuth 2.0

OAuth 2.0 is a REST API authorization method that is primarily used to allow third-party services limited access to data or services on behalf of a client without having to expose the client's credentials to said third party. 

This method uses the concept of temporary credentials called access tokens to grant access to the requested data/resources via a process called "flows". There are several types

• Authorization code
• Implicit
• Resource owner password credentials
• Client Credentials

to handle different clients and use cases. 

How it works

• The client requests authorization from the resource owner.
• The client receives an authorization grant.
• The client requests an access token from the authorization server.
• The authorization server authenticates the client and validates the grant, then issues an access token.
• The client requests the protected resource from the resource server, presenting the access token.
• The resource server validates the access token and serves the request if it's valid.

Pros

• Allows third-party applications to access resources without exposing user credentials
• Supports different types of applications (web, mobile, desktop)
• Provides fine-grained access control

Cons

• More complex to implement compared to Basic Authentication
• Requires careful management of tokens

Best Practices When Using OAuth 2.0 

• Ensure communication of access token via HTTPS
• Limit the scope of access and set token expiration times.
• Always implement a revocation mechanism to handle invalid tokens.

3. API Keys

API Key authentication, in concept, is similar to basic authentication, with the difference being that instead of a username and password, API providers assign a unique string of characters (the API key) to identify clients. When requesting access to an API endpoint, the API key must be included in the API call.

Example: GET /endpoint?api_key=oifa08afadfda098

Best Practices when using API Keys

• Just as with basic authentication, always use HTTPS to secure them.
• Never hardcode API keys. Instead, store them securely in a configuration file.
• Never use API keys in applications that deal with sensitive data and in scenarios that require you to log user activity.

4. JSON Web Tokens (JWTs)

JSON Web Tokens are considered the gold standard in REST API Authentication today. The added benefit of JWTs is that they can be used for API authorization as well. In essence, A JWT consists of three primary components:

• The header contains information about the type of algorithm (HS256, RS256) used to sign the token.
• The Payload contains the claims (user information, permissions, roles, and so on.) or data to be transmitted.
• The Signature is a cryptographic hash of the header and payload that verifies the identity of the issuer. 

JSON Web Tokens are represented in the following format: <header>.<payload>.<signature>.

How it works

1. The client authenticates with the server using their credentials.
2. The server generates a JWT containing claims about the user and signs it.
3. The client stores the JWT and sends it with subsequent requests in the Authorization header.
4. The server validates the JWT signature and processes the claims to authorize the request.

Pros

• Stateless: The server doesn't need to store session information
• Can contain user information and permissions, reducing database queries
• Can be used for both authentication and authorization

Cons

• Cannot be revoked before expiration (mitigation strategies exist)
• Size can become large if too much information is included

Best Practices when using JSON Web Tokens

• Use strong signing algorithms like RS256 to sign JSON Web Tokens.
• Always validate the claims within the payload before granting access.
• Always set expiration time to limit a JWT's validity to prevent its misuse.

5. Mutual TLS (mTLS)

Mutual TLS is a REST API Authentication method where the API client and the server verify and authenticate each other via TLS certificates (which must meet X.509 syntax requirements). Being a step up from the Secure Sockets Layer (SSL), they are often used in zero-trust security frameworks (where no entity is trusted by default).

Transport Layer Security (TLS) uses public-key cryptography—a security technology that uses two keys, public and private. All data encrypted with a public key can only be decrypted with the private key. With mTLS, this level of security both ways makes it especially resistant to various forms of attacks like spoofing, credential stuffing, brute force attacks, malicious API requests, and more. 

Best Practices when using Mutual TLS

• Avoid the usage of self-signed certificates. 
• Always obtain certificates from a trusted CA and configure Certificate Revocation Lists (CRLs) and Online Certificate Status Protocol (OCSP) to check and verify the status of a certificate in realtime.
• Always use a hardware security module (HSM) or a key management system (KMS) that can be used to store private keys securely.

6. OpenID Connect

Open ID Connect (OIDC) is a REST API Authentication method that enables third-party apps to verify the identity of an end-user (using Jason Web Tokens) and obtain their profile information if needed. It is also used in Single Sign On (SSO) to enable users to access multiple apps with a single set of credentials. 

It is essentially an additional identity layer built over the OAuth 2.0 security framework. Together, OIDC authenticates users and OAuth 2.0 governs which systems they can access. 

Best Practices When Using OpenID Connect

Since OpenID connect is built upon the OAuth 2.0 framework and uses JWT, similar best practices apply here.

• Choose the right flow (Authorization Code, Implicit, or Hybrid) for your specific application.
• Always use HTTPS to secure any transmitted information. 
• Use a well-established library or frameworks like Auth0, Okta, and IdentityServer4 to implement Open ID connect. 

7. HMAC (Hash-based Message Authentication Code)

HMAC is an authentication technology that relies on a shared secret (a secure key and a HASH function) rather than security certificates and asymmetric cryptography that all the technologies we have discussed up until now used. 

HMAC works as follows:

The data to be transmitted is run via an encryption algorithm, which is then altered by a HASH algorithm.

For example: SHA-256, SHA-3, or RIPEMD-128/60.

For the recipient to read the data, they would need the decryption key along with the knowledge of which HASH function was used in the process. 

Best Practices When Using HMAC

•  HAMC uses symmetric keys so use strong, randomly generated keys to improve its security. 
• Avoid using deprecated or weak hash functions like MD5 or SHA-1.
• Avoid hardcoding shared keys at all costs. 

Generic Best Practices For REST API Authentication And Authorization. 

Up until now, we looked at specific API authentication and Authorization mechanisms, along with the best practices to keep in mind while implementing them. There are, however, specific best practices that apply to API security as a whole. Let's look at those in detail. 

8. Implementing Rate Limiting and Throttling

Rate Limiting and Throttling serve the same purpose—they limit the number of API calls to protect your API servers. Although they sound the same, they serve two distinct purposes. 

Rate Throttling uses a mechanism called a throttle monitor and temporarily blocks API requests from clients if they exceed a pre-defined limit to make API requests for a specific amount of time. This technique is implemented to prevent overloading your servers or systems. 

Rate Limiting, on the other hand, limits the number of requests that can be placed to an API within a specific period. While throttling is generally applied on the server side, rate-limiting is implemented on a client level. 

Together, they prevent overloading servers, act as a deterrent for malicious attacks, and ensure that no one user can misuse or take over your API's resources. 

9. Secure Token Storage and Management

Secure token storage and management has been a recurring point throughout the blog, and for good reason. Just like passwords, they grant access to resources to any entity that possesses them.

Here are a few key points to note when it comes to token storage and management:

• Never hardcode tokens.
• Always give tokens and expiration dates. By default, they are valid forever once signed, which can lead to vulnerabilities.  
• When using JWTs, always encrypt the payload and always validate its claims.
• Always store tokens in a secure environment. (in encrypted databases or key management services like AWS KMS or Azure Key Vault, for example.)

Wrapping it up

There you have it—nine best practices to sure up your REST API authentication and authorization efforts. Diligently following them will help you enhance the security of your REST APIs. That said, do remember that security is never a one-time exercise. Keep yourself updated and keep implementing improved technology to stay ahead of evolving threats. 

Remember, security is an ongoing process. Stay informed about the latest security trends and continuously review and update your security measures to stay ahead of potential threats.

Whether you're building a new API or improving an existing one, these practices will help you create a more secure and reliable service for your users.

Sometimes, it's best to bring in the experts for critical tasks. Cobalt can improve your API authentication infrastructure, help speed up your API integrations, and more. 

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