How to handle authentication in a RESTful Client-Server architecture is a matter of debate.
Commonly, it can be achieved, in the SOA over HTTP world via:
- HTTP basic auth over HTTPS;
- Cookies and session management;
- Token in HTTP headers (e.g. OAuth 2.0 + JWT);
- Query Authentication with additional signature parameters.
You'll have to adapt, or even better mix those techniques, to match your software architecture at best.
Each authentication scheme has its own PROs and CONs, depending on the purpose of your security policy and software architecture.
HTTP basic auth over HTTPS
This first solution, based on the standard HTTPS protocol, is used by most web services.
GET /spec.html HTTP/1.1
Host: www.example.org
Authorization: Basic QWxhZGRpbjpvcGVuIHNlc2FtZQ==
It's easy to implement, available by default on all browsers, but has some known drawbacks, like the awful authentication window displayed on the Browser, which will persist (there is no LogOut-like feature here), some server-side additional CPU consumption, and the fact that the user-name and password are transmitted (over HTTPS) into the Server (it should be more secure to let the password stay only on the client side, during keyboard entry, and be stored as secure hash on the Server).
We may use Digest Authentication, but it requires also HTTPS, since it is vulnerable to MiM or Replay attacks, and is specific to HTTP.
Session via Cookies
To be honest, a session managed on the Server is not truly Stateless.
One possibility could be to maintain all data within the cookie content. And, by design, the cookie is handled on the Server side (Client, in fact, does even not try to interpret this cookie data: it just hands it back to the server on each successive request). But this cookie data is application state data, so the client should manage it, not the server, in a pure Stateless world.
GET /spec.html HTTP/1.1
Host: www.example.org
Cookie: theme=light; sessionToken=abc123
The cookie technique itself is HTTP-linked, so it's not truly RESTful, which should be protocol-independent, IMHO. It is vulnerable to MiM or Replay attacks.
Granted via Token (OAuth2)
An alternative is to put a token within the HTTP headers so that the request is authenticated. This is what OAuth 2.0 does, for instance. See the RFC 6749:
GET /resource/1 HTTP/1.1
Host: example.com
Authorization: Bearer mF_9.B5f-4.1JqM
In short, this is very similar to a cookie and suffers to the same issues: not stateless, relying on HTTP transmission details, and subject to a lot of security weaknesses - including MiM and Replay - so is to be used only over HTTPS. Typically, a JWT is used as a token.
Query Authentication
Query Authentication consists in signing each RESTful request via some additional parameters on the URI. See this reference article.
It was defined as such in this article:
All REST queries must be authenticated by signing the query parameters
sorted in lower-case, alphabetical order using the private credential
as the signing token. Signing should occur before URL encoding the
query string.
This technique is perhaps the more compatible with a Stateless architecture, and can also be implemented with a light session management (using in-memory sessions instead of DB persistence).
For instance, here is a generic URI sample from the link above:
GET /object?apiKey=Qwerty2010
should be transmitted as such:
GET /object?timestamp=1261496500&apiKey=Qwerty2010&signature=abcdef0123456789
The string being signed is /object?apikey=Qwerty2010×tamp=1261496500
and the signature is the SHA256 hash of that string using the private component of the API key.
Server-side data caching can be always available. For instance, in our framework, we cache the responses at the SQL level, not at the URI level. So adding this extra parameter doesn't break the cache mechanism.
See this article for some details about RESTful authentication in our client-server ORM/SOA/MVC framework, based on JSON and REST. Since we allow communication not only over HTTP/1.1, but also named pipes or GDI messages (locally), we tried to implement a truly RESTful authentication pattern, and not rely on HTTP specificity (like header or cookies).
Later Note: adding a signature in the URI can be seen as bad practice (since for instance it will appear in the http server logs) so it has to be mitigated, e.g. by a proper TTL to avoid replays. But if your http logs are compromised, you will certainly have bigger security problems.
In practice, the upcoming MAC Tokens Authentication for OAuth 2.0 may be a huge improvement in respect to the "Granted by Token" current scheme. But this is still a work in progress and is tied to HTTP transmission.
Conclusion
It's worth concluding that REST is not only HTTP-based, even if, in practice, it's also mostly implemented over HTTP. REST can use other communication layers. So a RESTful authentication is not just a synonym of HTTP authentication, whatever Google answers. It should even not use the HTTP mechanism at all but shall be abstracted from the communication layer. And if you use HTTP communication, thanks to the Let's Encrypt initiative there is no reason not to use proper HTTPS, which is required in addition to any authentication scheme.
Best Answer
Let me seperate up everything and solve approach each problem in isolation:
Authentication
For authentication, baseauth has the advantage that it is a mature solution on the protocol level. This means a lot of "might crop up later" problems are already solved for you. For example, with BaseAuth, user agents know the password is a password so they don't cache it.
Auth server load
If you dispense a token to the user instead of caching the authentication on your server, you are still doing the same thing: Caching authentication information. The only difference is that you are turning the responsibility for the caching to the user. This seems like unnecessary labor for the user with no gains, so I recommend to handle this transparently on your server as you suggested.
Transmission Security
If can use an SSL connection, that's all there is to it, the connection is secure*. To prevent accidental multiple execution, you can filter multiple urls or ask users to include a random component ("nonce") in the URL.
If that is not possible, and the transmitted information is not secret, I recommend securing the request with a hash, as you suggested in the token approach. Since the hash provides the security, you could instruct your users to provide the hash as the baseauth password. For improved robustness, I recommend using a random string instead of the timestamp as a "nonce" to prevent replay attacks (two legit requests could be made during the same second). Instead of providing seperate "shared secret" and "api key" fields, you can simply use the api key as shared secret, and then use a salt that doesn't change to prevent rainbow table attacks. The username field seems like a good place to put the nonce too, since it is part of the auth. So now you have a clean call like this:
It is true that this is a bit laborious. This is because you aren't using a protocol level solution (like SSL). So it might be a good idea to provide some kind of SDK to users so at least they don't have to go through it themselves. If you need to do it this way, I find the security level appropriate (just-right-kill).
Secure secret storage
It depends who you are trying to thwart. If you are preventing people with access to the user's phone from using your REST service in the user's name, then it would be a good idea to find some kind of keyring API on the target OS and have the SDK (or the implementor) store the key there. If that's not possible, you can at least make it a bit harder to get the secret by encrypting it, and storing the encrypted data and the encryption key in seperate places.
If you are trying to keep other software vendors from getting your API key to prevent the development of alternate clients, only the encrypt-and-store-seperately approach almost works. This is whitebox crypto, and to date, no one has come up with a truly secure solution to problems of this class. The least you can do is still issue a single key for each user so you can ban abused keys.
(*) EDIT: SSL connections should no longer be considered secure without taking additional steps to verify them.