API Keys vs OAuth vs JWT: Choosing the Right Auth Method

The Three Approaches

Choosing the right authentication method depends on your use case: who's calling your API, how much security you need, and how complex you're willing to get.

API Keys

A long, random string passed as a header or query parameter.

GET /api/data HTTP/1.1
X-API-Key: sk_live_abc123def456ghi789

How it works: The server looks up the key in a database and maps it to an account.

Pros:

• Dead simple to implement
• Easy for developers to understand
• No token expiration to manage

Cons:

• No built-in scoping (all-or-nothing access)
• Hard to rotate without downtime
• Can be accidentally committed to git or exposed in URLs
• Database lookup on every request

Best for: Server-to-server APIs, developer platforms, rate limiting identifiers.

Examples: Stripe, SendGrid, OpenAI

OAuth 2.0

A delegation framework where users grant limited access to third-party apps.

How it works: The user authenticates with an authorization server, which issues scoped access tokens to the requesting application.

Pros:

• Users never share passwords with third-party apps
• Granular scoping (read:email, write:repos)
• Token revocation support
• Industry standard (RFC 6749)

Cons:

• Complex implementation (multiple flows, token management)
• Requires an authorization server
• Overkill for simple APIs

Best for: Third-party integrations, user-facing apps, social login.

Examples: GitHub, Google, Facebook login

JWT (JSON Web Tokens)

Self-contained tokens that carry claims about the user.

GET /api/data HTTP/1.1
Authorization: Bearer eyJhbGciOiJSUzI1NiIs...

How it works: The server validates the token's signature and reads claims from the payload. No database lookup needed.

Pros:

• Stateless — no server-side session storage
• Self-contained — carries user info in the payload
• Fast validation (no DB lookup)
• Works well with microservices

Cons:

• Cannot be revoked once issued (without a blacklist)
• Payload is readable (not encrypted)
• Token size can be large
• Security pitfalls (alg:none, key confusion)

Best for: Microservices, stateless APIs, first-party auth.

Decision Matrix

Common Combinations

In practice, these are often used together:

• OAuth 2.0 + JWT: OAuth issues JWTs as access tokens (most common modern setup)
• API Keys + JWT: API key for service identification, JWT for user auth
• API Keys + OAuth: API key for rate limiting, OAuth for user access

Recommendation

• Public developer API → API Keys (simple, well-understood)
• Third-party integrations → OAuth 2.0 (user consent, scoping)
• Microservices / SPA → JWT (stateless, fast validation)
• All three → API key for identification + OAuth for auth + JWT for tokens