We are currently tasked with implementing a (preferably simple) authentication system for a mobile application communication with a RESTful API. The backend has user-specific data, identified by the user's phone number. I am trying to understand more about security in general, the different methods there are and why they work the way they work.
I thought of a simple authentication system:
The client sends a verification request to the api which includes their phone number and a generated guid.
The server sends an SMS message to the phone number with a verification code.
The client verifies their device by sending their unique guid, phone number and verification code.
The server responds with some kind of access token which the client can use for further requests.
I have the following questions:
Are there any major flaws in this approach?
Assuming we use HTTPS, is it secure enough to send the data otherwise unencrypted?
Can access tokens be stored on mobile devices safely so that only our app can read them?
Anything else we haven't thought of?
We already figured that when the mobile phone is stolen or otherwise compromised, the data is no longer secure, but that is a risk that is hard to overcome. Access tokens could be valid temporarily to minimize this risk.
I am assuming this approach is way to simple and there is a huge flaw somewhere :) Can you enlighten me?
There is a flaw. The system is susceptible to a brute-force attack.
Suppose I am an attacker. I will generate a guid for myself and send it along with some arbitrary phone number.
Next, I will just bruteforce my way through the possible SMS codes - if it's 6 digits, there's only 10^6 combinations. The bruteforce will be a matter of seconds - and then I will gain acess to the data of the person having this phone.
Also, as was pointed out in the comment by Filou, one can force you to send you arbitrary number of SMS, effectively making you sustain a financial loss at no cost.
There's also no valid defense from this attack:
If there is limited amount (N) of attempts for a given UID, I will
re-generate the guid every N attempts.
If there's a limit of requests per phone per amount of time, I can execute a DoS/DDoS attack by flooding every possible number with fake requests - hence, noone will be able to perform any requests.
A login/password or certificate authenication is mandatory before an SMS. Also:
Never use things like GUID in cryptography/security protocols. GUIDs are deterministic (i.e., knowing one value, you can predict future ones). Use crypto-libraries built-in functions for generating random streams
Never try to design security protocols yourself. Never. There's an awful lot of caveats even SSL 1.0 creators fell to - and they were sharp guys, mind you. Better copy common and proven schemes (Google's auth is a great example).
The approach you mentioned will works fine. Client will initiate a request with the phone number and a random id, server returns a verification token to the device. The token is one time use only with a set expiry. Then client will send the phone number, the random token used before and the validation token, which the server verifies. If valid, server sends a session token (or auth token) or similar which can be used for authentication. The session token can have a time out set from the server.
You did not mention if it's a web app or not. If it's a web app, you can set a https only session cookie from the server. Otherwise, you can store it locally in the app's local store. In usual case, apps cannot read private data belonging to other apps.
All communications must take place using HTTPS. Otherwise the whole scheme can get compromised via sniffing for traffic, because in the end you are using the auth token.
Related
My service allow any HTML documents to be converted to PDF using a POST request.
It is mostly used on the backend of my client's server and thus, the API key used for the communication is kept private.
Now, I'm thinking of a way to let my client's visitors be able to call my service on behalf of my client API key, without exposing this secure API Key.
My main issue here is security. If my client add an XHR POST requests that contains the API key, someone can take that API key and use it for their own purpose and abusing my client's account.
I could filter by domain, but this is easily spoofed so it's not possible.
I was wondering if there was a way to call a private service and be identified without risking its identity to be stolen, from the client ('s client) side?
If you're providing this sublet for authenticated users, then it's fairly trivial to give them unique keys (something that hashes their user ID or session against the API key and an initial timestamp, and checks it / logs it / looks for brutes before accessing the API). If you're doing it on the open web, without any kind of user authentication, then rate limiting gets very tricky indeed. Generally you'd want to use a combination of session hashes, IP address, operating system and browser data to create an anonymous profile that gets a temporary key on the frontend. One fairly solid way to do this is to force users through a CAPTCHA before serving a temporary key that allows them a limited number of uses of the permanent key. Any user whose ip/browser/session matches the existing attributes of a known client key is shunted to that one (and gets to skip the CAPTCHA); anyone who doesn't match an existing profile gets the CAPTCHA. That makes you a less attractive target for spoofing. On top of that, you should always rate-limit the entire thing, within a reasonable number of hits per day based on what kind of traffic you expect (or can afford), just so you don't have any surprises. This is the minimal security you'd want if your client's money is on the line every time their API key is used. It will require a simple database to store these "profiles", track usage, check for brutes and maintain the currently valid client keys. Client keys should always be expired regularly - either with a time diff against when they were created, or a regular cron process, or a maximum number of uses, etc.
One other thing I frequently do is rate-limit based on a curve. If I think 5 uses per minute is reasonable, for example, then after 5 uses in a minute from a session, each usage adds a delay of a fraction of a second * the number of uses in the last minute, squared, before the data is served.
The best answer would be to put this all behind a login system and secure that.
Assuming that you are using OAuth kind of system, In that case, make use of Access Token Mechanism that provides access to private API/User's data on behalf of User(Client) without exposing his/her credentials or API Key(Authentication key), also the access token can be expired based on the time/usage.
Example: The access token is generated against a single endpoint that can be the Html Conversion endpoint and will be expired once the action completion.
https://auth0.com/docs/tokens/access-token
And following blog post would be helpful to architect your authentication system
https://templth.wordpress.com/2015/01/05/implementing-authentication-with-tokens-for-restful-applications/
there is no good way to do front-end secure storage but my recommendation is :
is an API that used HMAC signing of requests in combination with OAuth authentication. The API key is actually a signing key. they key does not get transferred. The API key can still get found on the front-end but it becomes useless because you still need the OAuth token to send a valid request.
i know users will have to login in, but you can see this as an advantage because atleast you can log who is using the app by getting information from oauth.
please consider back-end secure storage!
You can use JWT tokens in my opinion. On the basis of username, password or any other info you can generate unique jwt tokens for different users.
Anyone can decipher these jwt tokens but not he unique security token.
If you want to add more more security to tokens, use JWE, encrypted web tokens.
More about these schemes can be found at https://medium.facilelogin.com/jwt-jws-and-jwe-for-not-so-dummies-b63310d201a3
Hashing is a decent option and should be done anyway, but for a fully secure method that wouldn't add too much complexity, you could simply abstract away from the authorization/API key by building your own API to interface with the API. This way you could both limit the kinds of things that can be done with the API key and also completely obscure the API key from the user
I don't think you should always go for user auth or JWT, it just doesn't fit all use cases. The idea of using a Captcha is interesting but also somewhat complex.
If complexity is not an issue I would rather use an infrastructure approach, I'm most familiar with AWS so I'll focus on that. Assuming you can change the host of your front end you can have your site hosted on an S3 bucket, served through a CDN, and create a proxy Lambda function that will hold the logic to call your API and store the API key as an encrypted environment variable. This Lambda you call through an API Gateway that can only be called by a specific IAM role which the S3 bucket also uses. You can also use a Cognito User Pool without authentication.
Going back to a simpler alternative the Captcha approach can be implemented as an attestation provider. I know of two services that do this, Firebase and KOR Connect. Due to Firebase using this approach only for their own resources as of the time of this writing I much rather use KOR Connect as it’s a very simple middleware that basically solves this issue. I won't go into detail about these services as it’s not the main concern of this topic but you can check the documentation their respective links.
I have been reading about securing REST APIs and have read about oAuth and JWTs. Both are really great approaches, but from what I have understood, they both work after a user is authenticated or in other words "logged in". That is based on user credentials oAuth and JWTs are generated and once the oAuth token or JWT is obtained the user can perform all actions it is authorized for.
But my question is, what about the login and sign up apis? How does one secure them? If somebody reads my javascript files to see my ajax calls, they can easily find out the end points and the parameters passed, and they could hit it multiple times through some REST Client, more severely they could code a program that hits my sign up api say a thousand times, which would be create a thousand spam users, or they could even brute force the login api. So how does one secures them?
I am writing my API in yii2.
The Yii 2.0 framework has a buil-in filter called yii\filters\RateLimiter that implements a rate limiting algorithm based on the leaky bucket algorithm. It will allow you to limit the maximum number of accepted requests in a certain interval of time. As example you may limit both login and signup endpoints to accept at most 100 API calls within a 10 minutes interval of time. When that limit is exceeded a yii\web\TooManyRequestsHttpException exception (429 status code) will be thrown.
You can read more about it in the Yii2 RESTful API related documentation or within this SO post.
I didn't use it myself so far but from what I did read about it in official docs, and I mean this:
Note that RateLimiter requires
$user
to implement the
yii\filters\RateLimitInterface.
RateLimiter will do nothing if
$user
is not set or does not implement
yii\filters\RateLimitInterface.
I guess it was designed to work with logged in users only maybe by using the user related database table, the default one introduced within the advanced template. I'm not sure about it but I know it needs to store the number of allowed requests and the related timestamp to some persistent storage within the saveAllowance method that you'll need to define in the user class. So I think you will have to track your guest users by IP addresses as #LajosArpad did suggest then maybe redesigning your user class to hold their identities so you can enable it.
A quick google search let me to this extension:yii2-ip-ratelimiter to which you may also have a look.
Your URLs will easily be determined. You should have a black list of IP addresses and when an IP address acts suspiciously, just add it to the black list. You define what suspicious is, but if you are not sure, you can start with the following:
Create something like a database table with this schema:
ip_addresses(ip, is_suspicious, login_attempts, register_attempts)
Where is_suspicious means it is blacklisted. login_attemtps and register_attempts should be json values, showing the history of that ip address trying to log in/register. If the last 20 attempts were unsuccessful and were within a minute, then the ip address should be blacklisted. Blacklisted ip addresses should receive a response that they are blacklisted whatever their request was. So if they deny your services or try to hack things, then you deny your services from them.
Secure passwords using sha1, for example. That algorithm is secure-enough and it is quicker than sha256, for instance, which might be an overkill. If your API involves bank accounts or something extremely important like that, important-enough for the bad guys to use server parks to hack it, then force the users to create very long passwords, including numbers, special characters, big and small letters.
For javascript you should use OAuth 2.0 Implicit Grant flow like Google or Facebook.
Login and Signup use 2 basic web page. Don't forget add captcha for them.
For some special client such as mobile app or webServer:
If you sure that your binary file is secure, You can create a custom login API for it. In this API you must try to verify your client.
A simple solution, you can refer:
use an encryption algorithm such as AES or 3DES to encrypt password
from client use a secret key (only client and server knows about it)
use a hash algorithm such as sha256 to hash (username + client time + an other
secret key). Client will send both client time and hash string to
server. Server will reject request if client time is too different
from server or hash string is not correct.
Eg:
api/login?user=user1&password=AES('password',$secret_key1)&time=1449570208&hash=sha256('user1'+'|'+'1449570208'+'|'+$secret_key2)
Note: In any case, server should use captcha to avoid brute force attack, Do not believe in any other filter
About captcha for REST APIs, we can create captcha base on token.
Eg.
For sign up action: you must call 2 api
/getSignupToken : to get image captcha url and a signup token
respectively.
/signup : to post sign up data (include signup token and
captcha typed by user)
For login action: we can require captcha by count failed logins base on username
Folow my api module here for reference. I manager user authentication by access token. When login, i generate token, then access again, client need send token and server will check.
Yii2 Starter Kit lite
I want to write a google chrome extension, that should make a request to my website to send and get some data, so, actually I should do an ajax request like it is written here https://developer.chrome.com/extensions/xhr.html
var xhr = new XMLHttpRequest();
xhr.open("GET", "http://api.example.com/data.json", true);
I wanted ask if there is a way to somehow secure the code or prevent others from using my api, because actually the other users can see the source code of the extension when they install it and so use my api without me being aware of it.
EDIT:
If I need to make some sort of authentication, than how can I authenticate the user before making the ajax call ? for authentication I will need to send a request to my server , but for that I should send , e.g. username and password, that should be saved somewhere in the extension's files, which, in fact, can be seen by the users, when they install the extension.
Thanks
Don't trust the browser, take steps to authenticate the user instead. So, in this case, you could require that YOU enter in a password that is used to communicate with your server.
Your Google extension would simple require you to enter in a password before it attempts to use AJAX to communicate with your server.
Be aware that you should build in means of protecting yourself from brute-force attacks. So, do things like lock everything down if there are more than some small number of wrong passwords, etc.
You could also consider using the password to simply decrypt the destination of the XHR, but if you go this route, you should store this very carefully, because this will be brute-forceable offline.
EDIT
Trying to lock down an API so that only a single application can use it is just not practical nor technically possible, so you're only hope of doing this is to authenticate the user using the API, regardless of the accessing software he is using. You could have the user sign an agreement that legally limits them to only your extension, but I suspect this will go largely unenforceable and will consume your time tracking abusers down.
If you don't want unauthorized people even knowing where the API is, you could perform authentication using an out-of-band mechanism: over the telephone, email, SMS, or simply, another API that will grant the user a password or token that requests to your API must be accompanied with.
During this out-of-band process, you could also grant the user, a unique URI (the API access point) that is only valid per authenticated session (https://api.totally-cool-extension.com/api/ijyeDvB5dYvSiWG97OLuTAoNWwbhuZ0/, for example). Any requests to your server on OTHER URIs simply won't work. However, this isn't theoretically much different than using the same API access point, and having a good password. It just changes the number of places in your architecture that will be performing authentication and/or authorization checks.
<aside>My vote would be to reduce the number of authorization/authentication points to as few as possible so that you can spend more time on getting that one place correct rather than having multiple places and possibly multiple logic flaws or other things that could lead to vulnerabilities.</aside>
You could also explore using Public Key Infrastructure and/or one-time passwords schemes or device-based token generators, etc., but in the end, you'll be allowing authenticated and authorized users to use your API. And, thanks to the Internet, this will not remain an undisclosed URI for long.
And, more importantly, it will not prevent someone from using the data on their own. Even with all these measures in place, it would be trivial for an authorized user to collect this data as it is being streamed to your extension. Or, if you employ point-to-point encryption, they could screen-scrap or use some form of JS introspection on your very code or even extract the data from their computer's memory.
I know you were looking for a silver bullet here, but it doesn't exist.
I think you are doing it wrong. You should never trust what's going on on internet users PC's. Never!
Move the line of trust one step inward, make your API public and then design the security where you have perfect control - server side.
I could not get correct aspect of your use case
Few Points:
Your extension code is always traceable( Any one who has installed extension can view the code)
If you are looking for security through complicated or obfuscated coding patterns you end up slow down of understanding process not the whole.
If your target is to ensure users who install your extension should be able to access and inert all other users( Who have gained illegal access or downloaded and edited code) have a session shared key per installation.
Please explain further use case so i can help you better.
I have been following a couple of articles regarding RESTful web services with WCF and more specifically, how to go about authentication in these. The main article I have been referencing is Aaron Skonnard's RESTful Web Services with WCF 3.5. Another one that specifically deals with HMAC authentication is Itai Goldstiens article which is based on Skonnards article.
I am confused about the "User Key" that is referenced to in both articles. I have a client application that is going to require a user to have both a user name and password.
Does this then mean that the key I use to initialise the
System.Security.Cryptography.HMACMD5 class is simply the users
password?
Given the method used to create the Mac in Itai's article
(shown below), am I right is thinking that key is the users
password and text is the string we are using confirm that the
details are in fact correct?
public static string EncodeText(byte[] key, string text, Encoding encoding)
{
HMACMD5 hmacMD5 = new HMACMD5(key);
byte[] textBytes = encoding.GetBytes(text);
byte[] encodedTextBytes =
hmacMD5.ComputeHash(textBytes);
string encodedText =
Convert.ToBase64String(encodedTextBytes);
return encodedText;
}
In my example, the text parameter would be a combination of request uri, a shared secret and timestamp (which will be available as a request header and used to prevent replay attacks).
Is this form of authentication decent? I've come across another thread here that suggests that the method defined in the articles above is "..a (sic) ugly hack." The author doesn't suggest why, but it is discouraging given that I've spent a few hours reading about this and getting it working. However, it's worth noting that the accepted answer on this question talks about a custom HMAC authorisation scheme so it is possible the ugly hack reference is simply the implementation of it rather than the use of HMAC algorithms themselves.
The diagram below if from the wikipedia article on Message Authentication Code. I feel like this should be a secure way to go, but I just want to make sure I understand it's use correctly and also make sure this isn't simply some dated mechanism that has been surpassed by something much better.
The key can be the user's password, but you absolutely should not do this.
First - the key has an optimal length equal to the size of the output hash, and a user's password will rarely be equal to that.
Second, there will never be enough randomness (entropy to use the technical term) in those bytes to be an adequate key.
Third, although you're preventing replay attacks, you're allowing anyone potentially to sign any kind of request, assuming they can also get hold of the shared secret (is that broadcast by the server at some point or is it derived only on the client and server? If broadcast, a man-in-the-middle attack can easily grab and store that - height of paranoia, yes, but I think you should think about it) unless the user changes their password.
Fourth - stop using HMACMD5 - use HMAC-SHA-256 as a minimum.
This key should at the very least be a series of bytes that are generated from the user's password - typically using something like PBKDF2 - however you should also include something transitory that is session-based and which, ideally, can't be known by an attacker.
That said, a lot of people might tell you that I'm being far too paranoid.
Personally I know I'm not an expert in authentication - it's a very delicate balancing act - so I rely on peer-reviewed and proven technologies. SSL (in this case authentication via client certificates), for example, might have it's weaknesses, but most people use it and if one of my systems gets exploited because of an SSL weakness, it's not going to be my fault. However if an exploit occurs because of some weakness that I wasn't clever enough to identify? I'd kick myself out of the front door.
Indidentally, for my rest services I now use SCRAM for authentication, using SHA512 and 512 bits of random salt for the stretching operation (many people will say that's excessive, but I won't have to change it for a while!), and then use a secure token (signed with an HMAC and encrypted with AES) derived from the authentication and other server-only-known information to persist an authenticated session. The token is stateless in the same way that Asp.Net forms authentication cookies are.
The password exchange works very well indeed, is secure even without SSL (in protecting the password) and has the added advantage of authenticating both client and server. The session persistence can be tuned based on the site and client - the token carries its own expiry and absolute expiry values within it, and these can be tuned easily. By encrypting client ID information into that token as well, it's possible to prevent duplication on to another machine by simply comparing the decrypted values from the client-supplied values. Only thing about that is watching out for IP address information, yes it can be spoofed but, primarily, you have to consider legitimate users on roaming networks.
Overview
I'm looking to create a (REST) API for my application. The initial/primary purpose will be for consumption by mobile apps (iPhone, Android, Symbian, etc). I've been looking into different mechanisms for authentication and authorization for web-based APIs (by studying other implementations). I've got my head wrapped around most of the fundamental concepts but am still looking for guidance in a few areas. The last thing I want to do is reinvent the wheel, but I'm not finding any standard solutions that fits my criteria (however my criteria my be misguided so feel free to critique that as well). Additionally, I want the API to be the same for all platforms/applications consuming it.
oAuth
I'll go ahead and throw out my objection to oAuth since I know that will likely be the first solution offered. For mobile applications (or more specifically non-web applications), it just seems wrong to leave the application (to go to a web-browser) for the authentication. Additionally, there is no way (I am aware of) for the browser to return the callback to the application (especially cross-platform). I know a couple of apps that do that, but it just feels wrong and gives a break in the application UX.
Requirements
User enters username/password into application.
Every API call is identified by the calling application.
Overhead is kept to a minimum and the auth aspect is intuitive for developers.
The mechanism is secure for both the end user (their login credentials are not exposed) as well as the developer (their application credentials are not exposed).
If possible, not require https (by no means a hard requirement).
My Current Thoughts on Implementation
An external developer will request an API account. They will receive an apikey and apisecret. Every request will require at minimum three parameters.
apikey - given to developer at regisration
timestamp - doubles as a unique identifier for each message for a given apikey
hash - a hash of the timestamp + the apisecret
The apikey is required to identify the application issuing the request. The timestamp acts similarly to the oauth_nonce and avoids/mitigates replay attacks. The hash ensures that request was actually issued from the owner of the given apikey.
For authenticated requests (ones done on the behalf of a user), I'm still undecided between going with an access_token route or a username and password hash combo. Either way, at some point a username/password combo will be required. So when it does, a hash of several pieces of information (apikey, apisecret, timestamp) + the password would be used. I'd love feedback on this aspect. FYI, they would have to hash the password first, since I don't store the passwords in my system without hashing.
Conclusion
FYI, this isn't a request for how to build/structure the API in general only how to handle the authentication and authorization from solely within an application.
Random Thoughts/Bonus Questions
For APIs that only require an apikey as part of the request, how do you prevent someone other than the apikey owner from being able to see the apikey (since sent in the clear) and make excessive requests to push them over usage limits? Maybe I'm just over thinking this, but shouldn't there be something to authenticate that a request was verified to the apikey owner? In my case, that was the purpose of the apisecret, it is never shown/transmitted without being hashed.
Speaking of hashes, what about md5 vs hmac-sha1? Does it really matter when all of the values are hashed with with sufficiently long data (ie. apisecret)?
I had been previously considering adding a per user/row salt to my users password hash. If I were to do that, how could the application be able to create a matching hash without knowing the salt used?
The way I'm thinking about doing the login part of this in my projects is:
before login the user requests a login_token from the server. These are generated and stored on the server on request, and probably have a limited lifetime.
to login the application calculates the hash of the users password, then hashes the password with the login_token to get a value, they then return both the login_token and the combined hash.
The server checks the login_token is one that it has generated, removing it from its list of valid login_tokens. The server then combines its stored hash of the user's password with the login_token and ensures that it matches the submitted combined token. If it matches you have authenticated your user.
Advantages of this are that you never store the user's password on the server, the password is never passed in the clear, the password hash is only passed in the clear on account creation (though there may be ways around this), and it should be safe from replay attacks as the login_token is removed from the DB on use.
That's a whole lot of questions in one, I guess quite a few people didn't manage to read all the way to the end :)
My experience of web service authentication is that people usually overengineer it, and the problems are only the same as you would encounter on a web page. Possible very simple options would include https for the login step, return a token, require it to be included with future requests. You could also use http basic authentication, and just pass stuff in the header. For added security, rotate/expire the tokens frequently, check the requests are coming from the same IP block (this could get messy though as mobile users move between cells), combine with API key or similar. Alternatively, do the "request key" step of oauth (someone suggested this in a previous answer already and it's a good idea) before authenticating the user, and use that as a required key to generate the access token.
An alternative which I haven't used yet but I've heard a lot about as a device-friendly alternative to oAuth is xAuth. Have a look at it and if you use it then I'd be really interested to hear what your impressions are.
For hashing, sha1 is a bit better but don't get hung up about it - whatever the devices can easily (and quickly in a performance sense) implement is probably fine.
Hope that helps, good luck :)
So what you're after is some kind of server side authentication mechanism that will handle the authentication and authorisation aspects of a mobile application?
Assuming this is the case, then I would approach it as follows (but only 'cos I'm a Java developer so a C# guy would do it differently):
The RESTful authentication and authorisation service
This will work only over HTTPS to prevent eavesdropping.
It will be based on a combination of RESTEasy, Spring Security and CAS (for single sign on across multiple applications).
It will work with both browsers and web-enabled client applications
There will be a web-based account management interface to allow users to edit their details, and admins (for particular applications) to change authorisation levels
The client side security library/application
For each supported platform (e.g.
Symbian, Android, iOS etc) create a
suitable implementation of the
security library in the native
language of the platform (e.g. Java,
ObjectiveC, C etc)
The library
should manage the HTTPS request
formation using the available APIs
for the given platform (e.g. Java
uses URLConnection etc)
Consumers of the general authentication and
authorisation library ('cos that's
all it is) will code to a specific
interface and won't be happy if it
ever changes so make sure it's very
flexible. Follow existing design
choices such as Spring Security.
So now that the view from 30,000ft is complete how do you go about doing it? Well, it's not that hard to create an authentication and authorisation system based on the listed technologies on the server side with a browser client. In combination with HTTPS, the frameworks will provide a secure process based on a shared token (usually presented as a cookie) generated by the authentication process and used whenever the user wishes to do something. This token is presented by the client to the server whenever any request takes place.
In the case of the local mobile application, it seems that you're after a solution that does the following:
Client application has a defined Access Control List (ACL) controlling runtime access to method calls. For example, a given user can read a collection from a method, but their ACL only permits access to objects that have a Q in their name so some data in the collection is quiety pulled by the security interceptor. In Java this is straightforward, you just use the Spring Security annotations on the calling code and implement a suitable ACL response process. In other languages, you're on your own and will probably need to provide boilerplate security code that calls into your security library. If the language supports AOP (Aspect Oriented Programming) then use it to the fullest for this situation.
The security library caches the complete list of authorisations into it's private memory for the current application so that it doesn't have to remain connected. Depending on the length of the login session, this could be a one-off operation that never gets repeated.
Whatever you do, don't try to invent your own security protocol, or use security by obscurity. You'll never be able to write a better algorithm for this than those that are currently available and free. Also, people trust well known algorithms. So if you say that your security library provides authorisation and authentication for local mobile applications using a combination of SSL, HTTPS, SpringSecurity and AES encrypted tokens then you'll immediately have creditibility in the marketplace.
Hope this helps, and good luck with your venture. If you would like more info, let me know - I've written quite a few web applications based on Spring Security, ACLs and the like.
Twitter addressed the external application issue in oAuth by supporting a variant they call xAuth. Unfortunately there's already a plethora of other schemes with this name so it can be confusing to sort out.
The protocol is oAuth, except it skips the request token phase and simply immediately issues an access token pair upon receipt of a username and password. (Starting at step E here.) This initial request and response must be secured - it's sending the username and password in plaintext and receiving back the access token and secret token. Once the access token pair has been configured, whether the initial token exchange was via the oAuth model or the xAuth model is irrelevant to both the client and server for the rest of the session. This has the advantage that you can leverage existing oAuth infrastructure and have very nearly the same implementation for mobile/web/desktop applications. The main disadvantage is that the application is granted access to the client's user name and password, but it appears like your requirements mandate this approach.
In any case, I'd like to agree with your intuition and that of several other answerers here: don't try to build something new from scratch. Security protocols can be easy to start but are always hard to do well, and the more convoluted they become the less likely your third-party developers are to be able to implement against them. Your hypothetical protocol is very similar to o(x)Auth - api_key/api_secret, nonce, sha1 hashing - but instead of being able to use one of the many existing libraries your developers are going to need to roll their own.
Super late to the party but I wanted to throw in some additional points to consider for anyone interested in this issue. I work for a company doing mobile API security solutions (approov) so this whole area is definitely relevant to my interests.
To start with, the most important thing to consider when trying to secure a mobile API is how much it is worth to you. The right solution for a bank is different to the right solution for someone just doing things for fun.
In the proposed solution you mention that a minimum of three parameters will be required:
apikey - given to developer at registration
timestamp - doubles as a unique identifier for each message for a given apikey
hash - a hash of the timestamp + the apisecret
The implication of this is that for some API calls no username/password is required. This can be useful for applications where you don't want to force a login (browsing in online shops for example).
This is a slightly different problem to the one of user authentication and is more like authentication or attestation of the software. There is no user, but you still want to ensure that there is no malicious access to your API. So you use your API secret to sign the traffic and identify the code accessing the API as genuine. The potential problem with this solution is that you then have to give away the secret inside every version of the app. If someone can extract the secret they can use your API, impersonating your software but doing whatever they like.
To counter that threat there are a bunch of things you can do depending on how valuable the data is. Obfuscation is a simple way to make it harder to extract the secret. There are tools that will do that for you, more so for Android, but you still have to have code that generates your hash and a sufficiently skilled individual can always just call the function that does the hashing directly.
Another way to mitigate against excessive use of an API that doesn't require a login is to throttle the traffic and potentially identify and block suspect IP addresses. The amount of effort you want to go to will largely depend upon how valuble your data is.
Beyond that you can easily start getting into the domain of my day job. Anyway, it's another aspect of securing APIs that I think is important and wanted to flag up.