What is OTP ?

A one-time password (OTP), also known as one-time PIN or dynamic password, is a password that is valid for only one login session or transaction, on a computer system or other digital device. OTPs avoid a number of shortcomings that are associated with traditional (static) password-based authentication; a number of implementations also incorporate two-factor authentication by ensuring that the one-time password requires access to something a person has (such as a small keyring fob device with the OTP calculator built into it, or a smartcard or specific cellphone) as well as something a person knows (such as a PIN).
OTP generation algorithms typically make use of pseudorandomness or randomness, making prediction of successor OTPs by an attacker difficult, and also cryptographic hash functions, which can be used to derive a value but are hard to reverse and therefore difficult for an attacker to obtain the data that was used for the hash. This is necessary because otherwise it would be easy to predict future OTPs by observing previous ones.