API key: from basics to protection - everything you need to know

If you have ever seen a long sequence of letters and numbers when setting up an integration with some service, that was the API key. But what does it actually do? And why is it referred to as a password that should not be shared with anyone? Let's break it down in detail.

What is an API and why do you need it?

First, a bit of theory. API is a programming interface through which various applications and services communicate with each other by exchanging data. Imagine it as a mediator between two systems that want to tell each other something.

For example, any web application can receive quotes for crypto-assets, trading volumes, and market capitalization through the API of an existing service, instead of gathering this data itself. This saves time and resources.

But here arises a logical question: how does the system know who exactly is requesting this data? How does it ensure that it is indeed you and not some hacker? For this, there are API keys.

What is an API and how does its key work?

API key is a unique code that serves as proof of your identity in the digital world. Essentially, it is a password for your application. When you send a request to the API, you attach this key so the system knows: “Yes, this is indeed the user I granted access to.”

A key can take the form of a single code or a set of several keys, depending on the system. Some keys serve for authentication (checking who you are), while others are for authorization (checking what you are allowed to do).

In practice, it looks like this:

• You create an API key in your personal account
• Integrate it into your application
• Every time the program calls the API service, it sends this key.
• The service checks the key, recognizes you and grants access.

If the key is stolen, the attacker will gain access to all the access towers that its owner had.

How does the authentication system work via the API key?

Although it sounds simple, there can be quite complex work happening behind the scenes.

Authentication is the process by which a system verifies that you are who you claim to be. An API key is your digital “passport”.

Authorization is the next step when the system already knows who you are and decides what operations you are allowed to perform. For example, your key may grant you the right to read data, but not the right to modify it.

Some systems additionally use cryptographic signatures — this is another layer of security. A digital signature is added to the request, which guarantees that the data has not been altered in transit and also confirms the authorship of the request.

Cryptographic Signatures: Symmetric and Asymmetric

Not all API keys work the same way. There are two main types of cryptographic signing:

Symmetric keys: simple and fast

In this method, one secret key is used to create a signature and to verify it. Both the client ( and the server )API( know this key.

Advantages:

• Processes faster
• Less load on the processor
• Easier to implement

Disadvantages:

• If the key is compromised, an attacker can both sign requests and verify signatures.

A good example of a symmetric key is HMAC )Hash-based Message Authentication Code(.

) Asymmetric keys: more reliable, but more complex

Here, two different keys are used, which are cryptographically linked to each other:

• Private key — kept only by you, used to create a signature
• Public key — is publicly available, used only for signature verification.

This method is more secure, as anyone who can verify the signature cannot forge it. A classic example is a pair of RSA keys.

Advantages:

• Higher security due to the distribution of functions
• The private key remains local
• External systems can verify signatures without the ability to generate them.
• Some systems allow the addition of an additional password to private keys.

Are API keys really safe?

Frankly speaking: as secure as the password to your email. That is, the security primarily depends on you.

Main threats

API keys often become targets of cyberattacks, because they can be used to:

• Access private data
• Perform financial transactions
• Upload large volumes of data
• Gain control over resources

There have been cases where search bots and scanners successfully attacked public code repositories like GitHub ### to steal API keys left in the code. The result is unauthorized access to user accounts.

( Why is it dangerous?

If the API key is stolen, the attacker can:

• To impersonate you in front of the API service
• Use your account for your own purposes
• Perform operations that will appear as your actions
• Cause you material damage

And the worst part: some keys do not have an expiration date. If a key is stolen, the attacker can use it indefinitely until the key itself is revoked.

The consequences of theft can be catastrophic — from significant financial losses to the compromise of all your integrated systems.

How to Protect Your API Key: Practical Tips

Since the risks are real, you need to hold the defense. Here’s what to do:

) 1. Regularly update the keys

Change your API keys as regularly as you change your passwords. Ideally, every 30–90 days. Consider this a mandatory “preventive measure.”

Most services allow you to easily generate a new key and delete the old one with just a few clicks.

2. Use IP address whitelists

When creating the API key, specify which IP addresses it can be used from. This is a whitelist of IPs.

Example: if you know that the program will only run from the server with the address 192.168.1.100, specify that address. If an attacker steals the key but tries to use it from somewhere else, access will be denied.

Some systems also allow you to set a blacklist of IPs — a list of blocked addresses.

3. Have several keys with different permissions

Don't put all your eggs in one basket. Instead of one all-powerful key, create several with limited permissions:

• One key is only for reading data
• The second one is for writing data
• The third one is for administrative operations.

Yes, if one key is compromised, the attacker will not gain full control. Additionally, you can set different IP whitelists for each key.

4. Keep your keys safe

This golden rule:

• Never store keys in plain text format
• Never place them in public code repositories.
• Never use public computers to work with keys

Instead of this:

• Use password managers like Bitwarden, 1Password
• Store in encrypted vaults
• Use environment variables or configuration files that are not available in the repositories

5. Never share API keys

This is not just a recommendation — it is a hard rule. Sharing your API key with a colleague or partner is the same as giving them the password to your bank account.

If you need to give someone access:

• Create a new key just for them with restricted permissions
• Set the appropriate IP whitelist
• When someone no longer needs access, remove this key.

6. What to do if the key is compromised?

If you suspect that the key has been stolen:

1. Immediately disconnect the key — stop its use to prevent further damage.
2. Create a new key — use it in your applications
3. Analyze the logs — check how long ago and from where the key is being used.
4. If there are financial losses:
   • Take screenshots of all the details of the incident
   • Contact the relevant platform/organization
   • Write an official statement to law enforcement authorities
   • File a complaint with the relevant authorities

This significantly increases the chances of recovering lost funds or receiving compensation.

Summary: An API key is your digital key

API keys provide critical authentication and authorization functions in the digital world. But they are only as secure as you manage them.

Remember: API key is like a password, or even worse. Unlike a password, the key is often used automatically by the program, without your involvement. Therefore, it requires maximum attention.

Follow these simple rules:

• Change keys regularly
• Use IP whitelists
• They have several keys with different permissions
• Keep them encrypted
• Never shares them
• Know how to respond to compromise

And lastly: teach this to your colleagues and partners. API key security is everyone's responsibility.