Decentralized Authentication

Decentralized Authentication with Litecoin as a Service

🔐 Decentralized Authentication with Litecoin as a Service

The Problem: Traditional Authentication is Centralized

Most modern authentication systems still rely on centralized infrastructure, leading to:

• 🔓 Data Breaches – Passwords and sensitive data exposed

• 🎯 Single Points of Failure – One compromised server = system-wide vulnerability

• 👀 Lack of Privacy – User identities stored and sold

• ⛔ Platform Dependency – Logins tied to provider-controlled systems

• ❌ No True User Control – Users can't verify or manage their own credentials independently

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The Solution: Decentralized Authentication + Litecoin Blockchain

With Litecoin as a Service, we offer a fully decentralized authentication system using message signing, OTP derivation, and wallet-based identity.

No servers. No central control. Just blockchain-backed verification.

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🔑 What is Decentralized Authentication?

• Users authenticate by signing messages with their Litecoin wallet

• Messages can be Dapp-generated or user-generated

• OTP (One-Time Password) can be derived from the signed message

• Fully self-sovereign and verifiable authentication method

This method is ideal for Dapps, SDA(NFT)-based access, and Web3 login flows.

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🧠 Message Derivation Options

Your app can choose how the OTP message is generated:

1. Dapp-Generated Message

   • The app/service creates the message to be signed

   • Helpful for recovery systems and standardization

   • Ideal for centralized organizations transitioning to Web3

2. User-Generated Message

   • The user independently creates and signs their own message

   • Offers maximum privacy and control

   • The user accepts full responsibility for managing credentials

In the user-managed model, if the OTP or wallet is lost, no recovery is possible.

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🔐 Wallet Backup is Essential

Users must back up their credentials to ensure recovery:

• 🧩 Mnemonic Phrase used during Blockchain 2FA setup

This is the only mean to regenerate OTPs or verify identities if devices are lost.

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✅ Standards & Compliance

This decentralized authentication method aligns with:

• 📘 Decentralized Identity (DID) models

• 👤 Self-Sovereign Identity (SSI) principles

• 🛡️ Zero Trust Architecture

• 🧾 Privacy regulations and blockchain compliance

No passwords. No data harvesting. No vendor lock-in.

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🔗 How It Works (With Litecoin as a Service)

1. User Visits the App Login via his primary credentials (i.e. Username & Password)

2. Connect Wallet Connect to Litecoin Extension Pteri Wallet

3. Message Generation & Signing Either the app or user generates an authentication message and sign it using connected wallet

4. Add Secret Key Derived from Sign Message to Extension Wallet / Pteri Mobile Generate OTP from the signed message and Use the OTP

5. Grant Access If the OTP is valid, access is approved

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💼 Enterprise Integration

Enterprise developers can easily integrate using:

• 🔌 LiaaS APIs to create Decentralized Authentication

• 🧠 Custom fallback policies for recovery flows (optional)

Fully hosted, secure, and scalable — built on the Litecoin network.

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🚀 Get Started with the API

• 🧾 Onboard to Enterprise Plan → Azure Marketplace

• 🔐 Try Message Signing → Sign Message

• 🔢 Generate OTP → Derive OTP (Only available on Enterprise LiaaS Plan)

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🔗 Live Example Use Cases

• ✅ Wallet-based login for dApps

• ✅ SDA-gated access portals

• ✅ Universal decentralized 2FA for Web3 platforms

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📖 FAQs & Support

What if a user loses their wallet?

If a user loses access to their Litecoin wallet and has not backed up their private key or recovery phrase (mnemonic), they will no longer be able to sign authentication messages or generate OTPs. Since the authentication system is fully decentralized, there is no central authority to restore access except it's not user-managed model.

🔐Important: Always back up your wallet credentials securely. Without them, recovery is not possible unless the Dapp or service provides a fallback recovery mechanism.

Can OTPs be derived deterministically?

Yes. OTPs can be deterministically generated using the signed authentication message and current Litecoin blockchain height. This allows the OTP to be recreated anytime using the same wallet and message.

🔁 This makes the system stateless — the OTP does not need to be stored on any server, and users can regenerate it as long as they have their wallet.

What happens when migrating to a new device?

When moving to a new device, the user simply needs to restore their Litecoin wallet using their mnemonic phrase.

Once restored:

• They can sign messages and generate OTPs as usual

• No data or account migration is needed

⚠️ If the wallet was not backed up, access to the authentication system will be permanently lost.

For any further queries, please reach out to us at [email protected].