Applications built on public chains ask users to connect a wallet rather than create an account. The mechanism is a cryptographic signature, and it changes what the application knows and what it can lose.
Passwords require a shared secret
Conventional login means the user sends something the server also knows, and the server checks it against stored records.
That arrangement requires the server to hold credential data, protect it, and remain a target for anyone who wants it.
It also means the same secret is often reused elsewhere, so a breach at one service creates exposure at many others.
A signature proves control without disclosure
The application generates a message including its own identity and a value that cannot be reused, and asks the wallet to sign it.
The wallet signs with the private key, and the site recovers the signing address mathematically from the signature and the message.
Nothing secret has been transmitted. The key never leaves the wallet, and the application learns only which address controlled it.
The design removes an attack surface
With no credential store, there is nothing to breach in that particular way, and no password reset flow to be abused through a support channel.
The nonce and the site identity inside the message stop a signature captured on one site from being replayed on another.
Standardising the message format matters here, because a wallet can only warn a user meaningfully about what they are signing if the structure is recognisable.
The trade-offs are real
There is no recovery. An address whose key is lost cannot be restored by any support process, because no party holds anything that could restore it.
Identity is also public. The address becomes a persistent identifier, and its entire transaction history is visible to any application it connects to.
Using separate addresses for separate purposes is the common response, though transfers between them can link the addresses on chain if not handled carefully.
Signing requests deserve the same care as transactions
Because a signature costs nothing and produces no chain record, users approve them quickly, which is what malicious sites rely on.
A request that appears to be a login can instead authorise a transfer or a trade, and the difference is visible only in the message contents.
Wallets increasingly decode structured messages into readable summaries for exactly this reason, and reading that summary is the step that separates a login from a loss.