Decentralized Identity: Passwordless Agent Authentication

Passwordless Agent Authentication Using LiaaS and Pteri Wallet Signatures

Overview

This documentation outlines a secure, decentralized, and passwordless authentication system for autonomous AI agents using Litecoin wallet signatures and Litecoin-as-a-Service (LiaaS). By leveraging cryptographic signatures, this approach eliminates reliance on traditional credentials like passwords, OAuth tokens, or API keys, enabling robust identity verification for agent-based workflows.

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Problem Statement

As AI agents increasingly perform sensitive operations on behalf of users, secure authentication is critical. Traditional authentication methods, such as passwords, OAuth, or API keys, introduce significant risks:

• Centralized Vulnerabilities: Passwords and API keys are susceptible to theft, phishing, or mismanagement, especially in distributed agent environments.

• Credential Management Overhead: Managing and rotating credentials across multiple agents or services is complex and error-prone.

• Vendor Lock-In: OAuth-based systems often tie users to centralized providers, limiting flexibility in decentralized ecosystems.

• Agent Autonomy Risks: Agents acting autonomously must securely verify user identities without storing sensitive credentials.

These challenges demand a secure, decentralized, and user-friendly authentication mechanism that aligns with the principles of zero-trust security and agent-driven workflows.

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The Solution

This solution implements a passwordless authentication flow using Litecoin wallet signatures verified through LiaaS. Users authenticate by signing a cryptographic challenge with their Litecoin wallet (e.g., Pteri Wallet), and the agent verifies the signature via LiaaS, ensuring secure, decentralized identity verification.

Key Features

• Passwordless: Eliminates passwords, reducing attack surfaces and simplifying user experience.

• Decentralized: Leverages Litecoin blockchain and LiaaS for trustless verification, avoiding reliance on centralized authorities.

• Zero-Trust: No secrets or credentials are stored or shared by the agent.

• Scalable: Integrates seamlessly with existing agent architectures and supports cross-service identity reuse.

• Secure: Uses single-use nonces and cryptographic signatures to prevent replay… replay attacks.

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Architecture

The authentication flow involves the following components:

User
 ↕
Frontend (Client)
 ↕
Node.js Agent (Express Server)
 ↕
LiaaS Signature Verification API
 ↕
Litecoin Blockchain

Prerequisites

• A Litecoin-compatible wallet (e.g., Pteri Wallet or browser extension)

• API Key or Node URL for LiaaS to verify signature

• Node.js (v16 or higher) with Express

• (Optional) JWT for session management

• (Optional) Redis or a database for nonce storage in production

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📝Implementation Steps

Step 1: Generate and Send Login Challenge

The server generates a unique nonce and sends it to the client for signing.

// server.js
const express = require('express');
const crypto = require('crypto');
const app = express();
const store = new Map(); // In-memory store (use Redis/DB in production)

app.use(express.json());

app.post('/auth/request', (req, res) => {
  const { address } = req.body;
  const nonce = crypto.randomUUID();
  store.set(address, nonce);
  res.json({ message: `Sign this nonce: ${nonce}` });
});

app.listen(3000, () => console.log('Server running on port 3000'));

Step 2: User Signs Challenge

The client signs the nonce using a Litecoin wallet. Example using a wallet library (liaas-js):

const LiaaS = require("liaas-js");
const liaasSdk = new LiaaS();

const nonce = "Sign this nonce: <nonce>";
const signature = await liaasSdk.signLitecoinMessage(nonce); // Open a popup from Pteri chrome extension to sign message

Step 3: Client Submits Signature

The client sends the signed message to the server:

// POST /auth/verify
{
  "address": "ltc1qxyz...",
  "message": "Sign this nonce: <nonce>",
  "signature": "H+W2..." // signature received from extension after successful signing
}

Step 4: Verify Signature with LiaaS

The server verifies the signature using the LiaaS API.

const axios = require('axios');

app.post('/auth/verify', async (req, res) => {
  const { address, message, signature } = req.body;

  const storedNonce = store.get(address);
  if (!storedNonce || !message.includes(storedNonce)) {
    return res.status(400).json({ error: 'Invalid nonce or message' });
  }

  try {
    // Include your api key in authorization header generated from Pteri Dashboard.
    const response = await axios.post('https://pteri.xyz/api/utilities/verifyMessage', {
      address,
      message,
      signature
    });

    if (response.data.verified) {
      // Optional: Issue JWT for session management
      return res.json({ verified: true, user: address });
    }
    return res.status(401).json({ verified: false });
  } catch (error) {
    return res.status(500).json({ error: 'Verification failed' });
  }
});

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🔒Security Considerations

• Nonce Management: Nonces must be single-use, time-bound, and stored securely (e.g., in Redis or a database).

• Trusted Verification: Always use LiaaS’s official API for signature verification to prevent tampering.

• Network Security: Enforce HTTPS and configure strict CORS policies in production.

• Rate Limiting: Implement rate limiting to prevent brute-force attacks.

• Session Management: Use JWTs with short expiration times for session tracking, if needed.

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➕Benefits

• Enhanced Security: Eliminates credentials, reducing risks of theft or leakage.

• User-Friendly: Simplifies authentication to a single wallet-based action.

• Decentralized Identity: Enables portable, wallet-based identities across services.

• Extensible: Supports advanced access control (e.g., Omnilite NFT ownership).

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🧲Advanced Features

• Session Management: Implement JWT-based sessions for stateful interactions.

• Access Control: Restrict agent actions based on token or NFT ownership.

• Decentralized Dashboards: Build wallet-driven interfaces for agent monitoring.

• Multi-Wallet Support: Extend compatibility to other Litecoin-compatible wallets.

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🚀 Start Exploring the Litecoin Blockchain Capability with Zero Cost

• 📄Sign up on Pteri and gain instant access to powerful blockchain API endpoints with our Free Plan.→ Join for Free / Azure Marketplace
• 🔐 Try Message Signing → Sign Message
• 🔑 Try Message Verifying → Verify Message

Conclusion

This passwordless authentication system, powered by LiaaS and Litecoin wallet signatures, provides a secure, decentralized, and scalable solution for authenticating users to autonomous agents. By eliminating traditional credentials, it aligns with zero-trust principles and supports the evolving needs of decentralized agent ecosystems.

For further details or API access, visit LiaaS Documentation or contact the LiaaS support team.

📖 FAQs & Support

Can I use any Litecoin wallet for this authentication method?

Yes, as long as the wallet supports message signing (e.g., Pteri Wallet, Pteri Extension, or other LiaaS-compatible wallets).

Is the authentication flow secure without passwords or API keys?

Absolutely. It relies on public-key cryptography and one-time challenges, eliminating the risks of password reuse, leaks, or token interception.

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 challenge messages and sign in 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 [e-mail].