API Authentication Showdown: Keys vs. JWT vs. OAuth 2.0 – Which is Right for Your Microservices?

Authentication vs. Authorization: A Critical Distinction 🔑

This is the most common point of confusion. **Authentication** is verifying *who* the client is (Are you Bob?). **Authorization** is determining *what* the client is allowed to do (Can Bob delete this file?). The right choice of mechanism depends on whether you are securing a machine, a user, or delegating third-party access, and is often a layered combination of these technologies.

1. API Keys: Simplicity for Machine-to-Machine

API keys are long, secret, random strings usually passed in a header (e.g., X-API-Key). They identify the **client application** or a partner system, not a specific user. They are best suited for:

• Simple B2B integrations where the client application acts on its own behalf (e.g., weather data API).
• Basic usage tracking, service-level metering, and rudimentary rate limiting.

**Major Drawback:** They are static, long-lived, often never expire, and do not carry any user-specific context (roles, permissions, identity), making them highly unsuitable for applications where a human user is involved.

2. JWT (JSON Web Tokens): The Scalable Identity Carrier

JWTs are self-contained, digitally signed tokens. They have three parts: Header (algorithm), Payload (claims like user ID, roles, expiration time), and Signature. JWTs are the ideal choice for microservices because they enable **Stateless Authentication**:

• The **API Gateway** validates the signature using the public key and ensures the token is not expired (Authentication).
• Once validated, the Gateway trusts the claims in the payload and injects them into trusted internal headers for backend services.
• The backend services can make authorization decisions (BOLA, BFLA) without querying an external database for the user's state on every request, vastly improving performance and scalability.

3. OAuth 2.0: The Delegation Framework

OAuth 2.0 is an **authorization framework**, not an authentication mechanism (though OpenID Connect builds on it for authentication). It solves the complex problem of a user granting a third-party application (e.g., "Login with Google") **limited, specific access** to their resources without sharing their credentials. It works by issuing different types of tokens (Authorization Codes, Access Tokens, Refresh Tokens) and is the industry standard for managing user consent and token lifetime. **It is always used in conjunction with JWTs**, as the Access Token is typically a JWT containing the scope and claims granted by the user.