The Master Password Algorithm Explained: Pros, Cons, and Flaws

In 2012, Maarten Billemont introduced the Master Password algorithm, a novel approach to password security that challenged the conventional wisdom of password management. Instead of storing your sensitive credentials in a digital vault, this algorithm generates them on the fly, every single time you need them. The core idea is simple but powerful: if your passwords aren't stored, they can't be stolen.

For this system to be truly effective, users must disable all password-saving features in their browsers and devices, ensuring no credentials are ever written to disk. It’s a complete departure from the norm, trading a stored vault for a predictable, repeatable calculation.

It's important to note that the original Master Password project is no longer in active development. In 2021, Billemont announced its successor, Spectre, a revised and updated version of the algorithm, which is currently in beta.

How Does the Master Password Algorithm Work?

Think of the Master Password algorithm as a highly specialized calculator. You provide a few key pieces of information (parameters), and it performs a complex, one-way calculation to produce a unique password. Because the calculation is deterministic, the same inputs will always produce the exact same output.

The required inputs are:

• Your Full Name: A consistent personal identifier.
• Your Master Password: The single, secret passphrase you must memorize. This is the key to your entire system.
• The Site Name: The domain of the website or name of the application you're accessing (e.g., "google.com" or "Twitter").
• A Counter: An integer that starts at 1 by default. This is used specifically for password resets.

The workflow is straightforward: when you need to log in or create a new account, you open a Master Password-based app, enter these parameters, and it generates the correct password. You then copy and paste this password into the login form. The only secret you ever need to remember is your master password.

An Example in Action

Let's see how it works for a user named John Doe creating a Facebook account.

Name: John Doe
Master Password: secret password phase
Account: facebook.com
Counter: 1

When these four parameters are entered into the app, the algorithm calculates and produces a strong, unique password:

John Doe x secret password phase x facebook.com x 1 = tX0!tX7~qZ3!vO

Every time John needs to log into Facebook, he enters the same information and gets the same password. If Facebook is ever breached, only his Facebook password is compromised. And if he needs to change it? That's where the counter comes in.

To generate a new password, he simply increments the counter to 2:

Name: John Doe
Master Password: secret password phase
Account: facebook.com
Counter: 2

This produces a completely new password:

John Doe x secret password phase x facebook.com x 2 = hS7}oD3:pO8^uI

The Counter: The Algorithm's Biggest Flaw

While brilliant in theory, the counter system introduces a significant usability problem. For future logins to his Facebook account, John must remember that his counter is now 2. This might be manageable for one or two accounts, but what happens when you have dozens? Your Twitter account might be on counter 4, your bank on 7, and your email on 1.

Keeping track of these numbers becomes a daunting memory game. When asked about this on the Master Password community forum, the suggested solution was to simply try incrementing the counter one by one until you find the right password.

This "solution" is impractical and dangerous. Most websites will lock your account after a few failed login attempts to prevent a brute force attack. This flaw can easily leave you locked out of your own accounts, creating far more problems than it solves.

Pros and Cons of the Master Password Algorithm

Pros:

• No Vault to Hack: Since passwords are never stored, there is no central database for criminals to steal from your device or a cloud server.
• One Password to Rule Them All: You only need to memorize a single, strong master password.
• Unique Credentials Everywhere: The algorithm generates a different, complex password for every site, preventing credential stuffing attacks.
• Open Source: The code is available under the GPLv3 license, meaning anyone can audit it for security or build their own application.

Cons:

• Not for Teams: The model is designed for individuals. There is no built-in way to share credentials securely with coworkers, making it unsuitable for business use. For collaborative environments, password managers for teams are a necessity.
• Cumbersome Workflow: The process of opening a separate app, typing in the site name, and copy-pasting the password for every single login is slow and interrupts user flow.
• The Counter Problem: Forgetting the counter for an account can lead to being permanently locked out. This is the system's most significant point of failure.
• Single Point of Failure: If an attacker steals your master password—whether through a spear-phishing attack or other social engineering—they can generate the password for any of your accounts, provided they can guess the site name.

Conclusion: A Niche Innovation, Not a Mainstream Solution

The Master Password algorithm is a fascinating cryptographic experiment that successfully demonstrates the concept of stateless password generation. It offers a high level of security by eliminating the risk of a vault breach, a threat that plagues many traditional password managers.

However, its practical drawbacks, especially the flawed counter system and lack of team-based features, make it a difficult choice for the average user and a non-starter for businesses. For individuals who are highly technical and prioritize a zero-storage philosophy above all else, it may hold some appeal. For everyone else, modern, encrypted password managers offer a more practical, user-friendly, and collaborative approach to achieving an password security.

This is where TeamPassword excels. We provide a simple, secure, and affordable way for your team to share the logins and credentials they need to get work done. With our intuitive browser extension, your team can add, manage, and autofill passwords without ever slowing down. You get a secure, centralized vault that makes onboarding new employees and managing access effortless.

• Integrated TOTP Authenticator: Generate time-based one-time passcodes directly within TeamPassword, eliminating the need for separate authenticator apps on your phone.
• Enforceable 2FA: Mandate two-factor authentication for every user across your organization, ensuring a consistent and high standard of security.
• Detailed Activity Logs: Maintain full visibility with a complete audit trail of who accessed what and when, perfect for security audits and accountability.
• Unlimited Records & Groups: Store an infinite number of logins and organize them into logical groups by team, project, or client for easy access and management.
• Multiple User-Roles: Assign granular permissions to control exactly who can view, edit, and create credentials, ensuring access is granted only where it's needed.
• Free Google Sign-In: Simplify onboarding and daily access with secure, one-click login using your team's existing Google accounts.
• One-Time Share: Securely share a single password with an external contractor or partner for a limited time, without giving them permanent access to your records.

Stop relying on insecure spreadsheets or chaotic messaging apps. See how easy secure collaboration can be and start a free trial of TeamPassword today.