What Is FIDO2 and How Does It Work? Passwordless Authentication Advantages & Disadvantages

Logging into a website or service using the traditional username and password combination is no longer the safest or most effective approach. As cybercriminals become more technologically advanced, data protection methods must also evolve. 

This is where new authentication standards, such as FIDO2, can be a valuable tool for addressing these security challenges. But what is FIDO2 authentication, and what tools are used instead of passwords? How do FIDO2 security keys actually work?

At Hideez, we have helped dozens of organizations enable a seamless passwordless login experience over the past few years. As a certified FIDO Alliance member and a Microsoft-approved security key vendor, we remain at the forefront of the trends and advancements in cybersecurity. So let’s explore the topic further!

What is FIDO2? The New Passwordless Standard

FIDO stands for Fast Identity Online. With an added number two at the end, this acronym is based on previous work done by the FIDO Alliance, particularly in developing the Universal 2nd Factor (U2F) authentication standard.

The FIDO Alliance was founded in July 2012 by PayPal, Lenovo, Nok Nok Labs, Validity Sensors, Infineon, and Agnitio. The goal of this alliance was to reduce reliance on traditional passwords and improve how identity authentication works.

FIDO2 is the third standard to emerge from the FIDO Alliance, following the FIDO Universal Second Factor (U2F) and the FIDO Universal Authentication Framework (UAF).

The main objective of FIDO2 is to eliminate the use of passwords and traditional MFA methods (OTP, push notifications, SMS verification codes, etc.) and replace them with passwordless login methods: a fingerprint, face recognition, screen lock, or hardware tokens. As such, FIDO2 authentication is much more user-friendly and protects against common online attacks such as phishing, spoofing, keylogging, brute-force attacks, MITM, and other identity-based threats.

What Is a FIDO2 Authenticator?

A FIDO2 authenticator is a device or software that supports the FIDO2 standard for passwordless login. Designed to meet the FIDO2 standard, these tools generate and store cryptographic keys, allowing you to access accounts without passwords. They come in various forms, generally falling into these three categories:

• Biometric Authentication (often called “Passkeys”): Biometric authentication allows users to log in by scanning their fingerprint or face. It’s a fast, secure, and convenient option, widely supported on mobile phones and many modern laptops.
• Screen Lock:  In the absence of biometric sensors, users can authenticate with a device-specific PIN or screen lock to access their account. This option is especially suitable for desktops or older devices lacking built-in biometrics, maintaining a secure yet accessible authentication process. 
• Physical Security Keys: Also known as hardware tokens or FIDO2 keys, physical security keys are external devices that enable passwordless logins by connecting to endpoint devices through USB, NFC, or Bluetooth. Popular examples include YubiKeys, Hideez Keys, and Solokeys. Security key owners authenticate by inserting or tapping the key, often in combination with a PIN for added protection. Some keys even incorporate biometric sensors, combining the security of hardware authentication with the convenience of biometrics.

What are Passkeys and How Do They Compare to FIDO Authenticators?

In May 2022, Apple, Google, and Microsoft made a game-changing announcement: they would support FIDO2 authentication across their platforms under a new name, "Passkeys." By bringing all FIDO2 authentication forms together, they are aiming to make passwordless logins more accessible and seamless for both individual consumers and enterprises.

So, are Passkeys just FIDO2 authenticators with a new name? Not quite. Passkeys share the same fundamental structure as FIDO2 authenticators, but there’s one key difference. While traditional FIDO2 specifications require that the private key never leaves your device, Passkeys can work in two distinct ways:

• Synced Passkeys use cloud storage (like iCloud, Google Password Manager, or Microsoft Authenticator) to seamlessly sync credentials across all user devices. This means you’re no longer locked out of your accounts if you lose access to one device. Synced Passkeys maintain strong security while allowing easy cross-device access, so logging in is smooth, whether you’re on your laptop, tablet, or phone.
• Device-bound Passkeys, on the other hand, stay tied to a specific physical device, such as a physical security key or a mobile phone. These Passkeys stick to the strictest security principles, ensuring that your credentials don’t work on any other hardware. This makes them ideal for organizations with strict security policies, as they limit access to a single authorized device, adding an extra layer of control.

The shift to a cross-platform, cross-device model has made FIDO2 authentication practical for both personal and business use. However, passwordless tools are used quite differently by individuals and enterprises, primarily due to differences in scale, user management, and regulatory requirements.

FIDO Platform/ Browser Support from FIDO Alliance

How Does FIDO2 Work?

The FIDO2 protocol relies on public-key cryptography to deliver secure, password-free authentication. By exchanging private and public keys, it validates each user’s identity without exposing sensitive information.

Here’s a simple example of how FIDO2’s passwordless authentication flow works:

1. When a user initiates a FIDO2 login on a web service, the FIDO2 server sends a challenge. This challenge requires the user to respond by signing it with their private FIDO2 key.
2. The user then takes action using their FIDO2 authenticator, which they set up previously. This can mean touching a fingerprint reader, tapping a security key, or entering a PIN. The authenticator sends a response back to the server with the signed private key data.
3. Finally, the server checks this signature against the public key it registered during setup. If everything checks out, the user gains access to their account — no password needed!

Once the secure communication path is established, the setup credentials are stored permanently, allowing quick, password-free access for future logins. The best part? You never share any sensitive information with the server during this process.

Your biometric data stays on your personal device and never gets transmitted to a remote server. The server only receives confirmation that your identity check passed, keeping your private details exactly where they belong — on your device.

FIDO2 Authentication Use Cases

So, how does FIDO2 affect the overall user experience through real-life examples? Even more importantly for the average user, in what form can you implement it in your day-to-day life? Let’s take a closer look at how you can implement FIDO2 passwordless login in different forms:

1. Platform authenticators

Platform authenticators are built into your device and can’t be removed, making them easy and convenient. Essentially, you can complete the entire authentication process on the same device you used to start the login. 

An example? Scanning your fingerprint with a built-in fingerprint reader on your laptop. No external device is needed — just a quick touch, and you’re in.

Example of Platform Authentication

2. Cross-platform authenticators

Also known as roaming authenticators, cross-platform authenticators are external devices designed to work across multiple devices. For instance, you might use your smartphone or a physical security key, like the Hideez Key, to log into a desktop application on your computer. 

Physical security keys are always classified as cross-platform, while smartphones can act as both internal (platform) and external (cross-platform) authenticators, depending on how you use them.

FIDO2 Advantages and Disadvantages

FIDO2 Advantages

FIDO2 authentication brings a host of benefits to modern security. Here are some of the standout reasons it’s gaining popularity among both individuals and businesses:

• Strong Security. The most significant advantage of FIDO2 authentication is that it creates a much smaller attack window for cybercriminals. To access your sensitive private information, attackers would need a FIDO2 authenticator, which is physically always by your side in the form of your device or biometrics.
• Zero Trust Compatibility. The Zero Trust framework operates on the principle of "never trust, always verify," which is crucial in today’s distributed work environments. FIDO2 fits perfectly with this model, offering phishing-resistant multi-factor authentication that aligns with Zero Trust principles.
• Better User Experience. A more streamlined experience, as you won’t have to remember multiple login details and passwords for each of your accounts. The FIDO2 U2F security key works across all supported platforms, offering maximum security and user convenience.

FIDO2 Disadvantages

Of course, like any other security method, the FIDO2 standard does have certain disadvantages. These drawbacks aren’t deal-breakers, but you should be aware of them if you plan on implementing FIDO2 passwordless authentication as a security practice.

• Limited Consumer Adoption: Although FIDO2 adoption is growing, it’s not yet universal among web services. As a consumer, you can enable passwordless sign-in for popular services like Facebook, Twitter, Google, Dropbox, GitHub, and many others. However, many websites still lack FIDO2 support. On the enterprise side, though, companies benefit from passwordless SSO solutions. Hideez and other vendors make it possible to integrate nearly any web service with FIDO authentication, often at no additional cost.
• Enterprise Considerations: Passkeys are certainly an improvement over passwords, but for organizations needing tight control over user identity, synced Passkeys may not be ideal. In these cases, device-bound Passkeys on physical FIDO2 security keys provide maximum security and compliance, making them the best fit for enterprise environments with strict security standards.

How to Enable FIDO2 Authentication?

FIDO2 authentication allows users to log in securely without passwords, leveraging public-private key pairs and strong, phishing-resistant methods. Here's a step-by-step guide to enable FIDO2 authentication for both personal and enterprise use:

For personal use

To set up passwordless sign-ins as an individual user, you have to go through a few setup steps:

1. Check Compatibility

• Verify if the web services you use support FIDO2 or Passkey-based logins.
• Popular platforms like Google, Microsoft, and Apple now offer Passkey support for secure sign-ins.

2. Access Security Settings

• Go to your account's Security or Account Settings page.
• Look for an option labeled Security Key, Passkey, or Passwordless sign-in (terminology may vary by service).

3. Register Your FIDO2 Authenticator

• Follow the prompts to register your biometric-enabled device or a physical security key.

• During setup, the service will create a public-private key pair unique to your account.

4. Enjoy Seamless Logins! On subsequent logins, you’ll use your chosen FIDO2 method instead of a password.

Example of setting up Passkeys in Google Workspace

For enterprise use

Implementing FIDO2 authentication in an organizational environment requires more strategic planning. Here's how to get started:

1. Assess Security Needs

• Define user groups based on their access levels. For example, general users may use synced Passkeys on personal or corporate devices. Meanwhile, privileged users (e.g., managers or executives) may require physical security keys for enhanced security.
• Evaluate your organization's compliance requirements and threat model to decide on the appropriate mix of FIDO2 solutions. In the U.S., there are regulations like HIPAA, PCI DSS, and FFIEC guidelines that emphasize strong authentication mechanisms, particularly in healthcare, finance, and government sectors. In Europe, DORA and NIS2 Directive have somewhat similar rules to protect critical infrastructure against cyber threats. 

2. Choose Your Solution Provider

• Select a provider that integrates well with your IAM systems (e.g., Microsoft Active Directory, Okta, Ping Identity, etc.).
• Look for a company supporting a range of FIDO2-compliant methods, including biometrics, mobile authentication, and FIDO2 keys. Ensure the solution will scale easily as your organization grows.
• Evaluate integration capabilities with existing systems, such as legacy applications, workstation logins, and Remote Desktop Protocol (RDP) environments. Advanced features like adaptive authentication, real-time threat monitoring, and customizable policies for different user groups can further enhance security and usability.

3. Start a Pilot Project

Collaborate with your passwordless authentication provider to launch a pilot program for implementing passwordless authentication across select enterprise applications. Start with a small group of users to assess usability, compatibility with workflows, and overall employee satisfaction. Use this phase to gather feedback and identify potential challenges before scaling organization-wide.

Try Going Passwordless with Hideez

If you’re unsure where to start, Hideez is here to simplify your journey to passwordless authentication. With our Basic Identity cloud portal you can enable free passwordless Single Sign-On (SSO) for up to 50 users. This solution allows employees to log in to web services using Passkeys synced across their personal devices, leveraging their embedded biometric features for seamless and secure authentication. It’s an easy, cost-effective way to test the benefits of going passwordless without committing to complex integrations.

For organizations with more sophisticated needs, Hideez offers the Enterprise Identity service designed to handle complex IT environments and unique authentication scenarios. Our solutions support a wide range of FIDO2-compliant methods, including hardware security keys, biometrics, and mobile authenticators, ensuring flexibility and adaptability for diverse use cases. Whether it’s securing logins to legacy systems, workstations, or RDP environments, Hideez provides comprehensive options tailored to your requirements. With a 30-day free trial, you can explore how passwordless authentication enhances security, reduces user friction, and eliminates password-related risks.

Ready to embrace the future of authentication? Book a demo today and see how Hideez can help you transform your security strategy!

FAQ

1. What Is FIDO U2F and How Does It Work?

FIDO U2F (Universal 2nd Factor) is a security standard developed to enhance online authentication by adding a strong second factor to traditional password-based logins. It uses a hardware security key, such as a USB or NFC device, that generates a unique cryptographic key for each service. Users authenticate by tapping their key or inserting it into their device, providing phishing-resistant two-factor authentication (2FA). U2F does not replace passwords but complements them, making logins more secure.

2. FIDO2 vs. U2F - What is the Difference?

The key distinction between FIDO2 and FIDO U2F lies in their scope. FIDO2 was created to enable passwordless authentication, eliminating the need for passwords entirely. In contrast, FIDO U2F was designed specifically as a second factor to strengthen password-based logins, acting as FIDO 2FA.

With the release of FIDO2, U2F has been integrated into the FIDO2 framework under the name CTAP1 (Client to Authenticator Protocol 1). This ensures that existing U2F devices can still function as a second factor in FIDO2-enabled systems, offering backward compatibility. Websites that support FIDO2 typically allow for passwordless logins, but some may still use U2F for enhanced 2FA scenarios.

Moreover, FIDO2 introduced CTAP2 and WebAuthn as part of its modern standard. CTAP2 enables advanced FIDO2 authentication capabilities, including passwordless login. Devices with CTAP2 support are considered FIDO2 authenticators, and if they also support CTAP1, they can provide backward compatibility with U2F.

3. FIDO2 vs. WebAuth

FIDO2 and WebAuthn are closely related but serve different purposes. FIDO2 is the broader standard that encompasses both WebAuthn (developed by the W3C) and CTAP2 (developed by the FIDO Alliance). WebAuthn is the web-based API that enables browsers and servers to communicate with FIDO2 authenticators, allowing passwordless login. It is essentially the protocol that makes FIDO2 usable for online authentication across websites and applications. While WebAuthn handles the communication, CTAP2 defines how authenticators interact with client devices.

4. FIDO2 vs. FIDO

FIDO (Fast Identity Online) is the overarching alliance and framework that encompasses all its standards, including FIDO U2F, FIDO2, and the protocols within them. FIDO2 is an evolution of the original FIDO framework, expanding its capabilities to enable passwordless logins through WebAuthn and CTAP2. In contrast, FIDO U2F, as part of the original framework, focused exclusively on providing a secure second-factor authentication mechanism.

5. What Websites Are FIDO2 Compliant?

A growing number of websites and services are FIDO2 compliant, including major tech platforms like Google, Microsoft, Apple, and Dropbox. These services allow users to register FIDO2-compatible authenticators, such as hardware keys or biometric devices, to secure their accounts. Many organizations are also integrating FIDO2 for internal use, enabling passwordless logins for employees. To check if a specific website supports FIDO2, look for authentication options like "Passwordless Login," "FIDO Key," or "Passkeys" in the security settings.