HOTP (HMAC-based One-time Password): An algorithm that computes a one-time password from a shared secret key and an incrementing counter. In a security context, this provides a robust method of two-factor authentication, enhancing user verification processes by generating unique, counter-based credentials that are difficult for attackers to replicate or predict, thereby protecting sensitive data and system access. HOTP uses a counter to produce credentials, which do not rely on a clock to change credentials after a set time. The “one-time” element simply means the credentials are meant to only be used once and are invalid in the future.