Authentication information is encrypted in storage or during
transit. Examples include the encryption of plain-text passwords passed over
networks, the encryption of authenticating information that uniquely
identifies a physical item such as a piece of paper by minor deviations in
it's surface, and the distribution of authentication over multiple paths
to reduce path dependency.
Complexity: The basic issues in encrypted authentication are how to use
encryption to improve the effectiveness of the process and and what
encryption algorithm to use to attain the desired degree of effectiveness.