Abstract: The present invention is directed to a hardware authentication system for a public key communications network. The public key network includes at least one user terminal and at least one hardware authentication terminal coupled by a communications medium. The authentication terminal generates and stores a plaintext message M, and generates from this message M a ciphertext message C by transforming the plaintext message M with the public key of the user terminal. The authentication terminal is further adapted to transmit the ciphertext message C by way of the medium to the user terminal.The user terminal is adapted to receive the enciphered or ciphertext message C from the hardware authentication terminal, and transform that ciphertext message with its private key to obtain a plaintext message M'. The user terminal is further adapted to transmit the plaintext message M' by way of the medium to the authentication terminal.