Are password managers secure?

None of us can remember all our passwords. Yes, we know to use strong passwords, and we never use the same password on more than one site. It's troublesome, but it's part and parcel of our Internet privileges.

Password managers--subscription services where a single password generates strong random passwords for sites you visit and fills them in for you--have become popular. They seem secure as they offer ease-of-use and a level of password-encryption we couldn't generate.

But are they really secure?

Critical defects

US-based tech news outlet Ars Technica reports that all is not well in the world of software-based password managers. "For almost two years, Ars has advised readers to use a software-based password manager to ease the password fatigue that comes from choosing and securing dozens of hard-to-guess passcodes," writes Dan Goodin in an Ars Technica article. "A research paper scheduled to be presented at a security conference next month underscores the hidden dangers of selecting the wrong products."

"The researchers examined LastPass and four other Web-based managers and found critical defects in all of them," writes Goodin. "The worst of the bugs allowed an attacker to remotely siphon plaintext passcodes out of users' wallets with no outward sign that anything was amiss."

He writes that while LastPass and three of the four other developers have since fixed the flaws, the findings are alarming. "If academic researchers from the University of California at Berkeley can devise these sorts of crippling attacks, so too can crooks who regularly case people's online bank accounts and other digital assets," writes Goodin.

"Bitter experience has taught us that, given enough time, the appearance of a vulnerability in any software is inevitable," says Richard Stagg, director and managing consultant of Hong Kong-based security firm Handshake Networking.

"This is what makes password managers so fascinatingly risky," he says. "They vastly improve your overall security profile as long as they are working properly, but if a glitch arises that compromises actual passwords, the impact is total. Is this trade-off worth it?"

Security mindset

Ordinary users might not find risk as fascinating as Stagg does, but remember that it's researchers like him who probe and pick apart security problems, looking for causes and fixes. The mindset of informed and curious researchers is what leads to security patches, managed security services, and many of other front-line defenses against the bad guys who stay up all night trying to figure out how to break our systems.

Stagg says that while the impact of a password manager compromise is massive, the risk of that happening is low.

"Despite this article on Ars Technica, I think it's [worth using a password manager]", he says. "The probability of any user falling victim to a password-reuse attack (where a user name and password are stolen from a vulnerable Web site and re-used on a different Web site) is always present, and this is one of the main risks that password managers tackle."

"The lesson is that a password manager improves the situation but should not be relied upon to solve the problem outright," says the Handshake Networking director." For high-security sites, I find that using a password manager alongside two-factor authentication (e.g. Google Authenticator) is still the best approach."

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