I'm not an active member of the computer security community, but I have considerable knowledge of and experience with the topic. I've been thinking about and working on the password problem for many years now and have come to some conclusions that I want to share more widely.
#1 – Attempting to eliminate passwords as an authentication method will never succeed due to market inertia. The industry should instead focus on evolving password authentication.
Password authentication is the most common authentication technique and is understood by a large number of users and by a large number of developers. There are very large amounts code that have been written that implement password authentication. Countless numbers of systems rely on it today.
#2 – It is time to acknowledge that knowledge factors are no longer viable and should be removed from online authentication systems.
Authentication is normally accomplished by various combinations of factors: something you know (knowledge factor), something you possess (possession factor) and something you are (inherence factor). Knowledge factors are problematic for users who struggle to manage them. This situation has been compounded as password complexity requirements have increased and hacker techniques have evolved.
#3 – All passwords should be completely random, consist of 256 bits of entropy derived from cryptographic random number generators and be assigned by service providers instead of chosen by users. This transforms the password from a knowledge factor into a possession factor (i.e. a key).
Computing power and cracking techniques have made effective passwords almost impossible for humans to represent as knowledge. Therefore, it is time to eliminate knowledge factors as a class and focus on possession and inherence factors.
Web browsers and third party password managers attempt to detect login forms in order to automate password authentication. This is difficult to implement and error-prone.
#5 – All keychain implementations must encrypt and decrypt key content locally. Vendors must not be able to access key content by design. Any key content that leaves the context of a device must be encrypted such that only the user can decrypt it via local authentication methods.
Vendors and service providers should assume that their infrastructure will be penetrated by hackers at least once in the lifetime of any product. Therefore, the only way to protect user content is to make it inaccessible to anyone but the user on their own device using local authentication and decryption methods. This is somewhat obvious today and many password managers are designed this way – but it should still be said.
#6 – All operating system and browser vendors should standardize on keychain formats and define standard APIs and formats for interchanging keys and other related content. Vendors should also synchronize keys between users' keychains on users' devices residing within each vendor's ecosystem.
Password managers are not the answer; password management is. Usernames, passwords and authentication are features of applications and operating systems – they are not a standalone product. They are best implemented and delivered as infrastructure. Vendors should recognize this and take responsibility for making it happen.