The text discusses the limitations of traditional passwords and the growing adoption of alternative authentication methods like One-Time Passwords (OTPs), which enhance security by providing a unique, time-limited code for each login session. OTPs can serve as the main authentication factor or as an additional layer in multi-factor authentication, helping to mitigate risks associated with static passwords and reducing attack vectors such as brute-force and phishing attacks. Implementing OTPs involves several steps, including generation, delivery, user input, and verification, with different methods like time-synchronized and counter-based systems. While OTPs offer significant security benefits, they require careful implementation to avoid vulnerabilities, and best practices include secure delivery channels, time-bound validity, and rate limiting. The text also outlines how to set up an OTP system in Next.js using tools like Twilio and MongoDB, emphasizing the complexity of building a secure OTP system and recommending the use of third-party providers for more robust solutions.