If you use public computers or public Wi-Fi at all, logging in with your primary password isn’t such a smart idea because it can be ‘sniffed’ easily. Fortunately there are ways to configure one-time logon codes that make it easy to login securely even if you are being sniffed at the time of login.
When should you use these?
As said above, when using public computers or public Wi-Fi. At home these don’t serve much of a purpose, but while on business, vacation, at the library or otherwise these come in very handy.
Why Hotmail?
Hotmail is by far the absolute best way to login securely when not using your computer at home. The reason is because even if you’re on a completely insecure connection, the login code only works one time and you don’t have to use your primary password.
The way this works is by letting Hotmail send a one-time code to your cell phone via means of text message. Here’s how to do it:
Step 1. Go to www.hotmail.com
If you are currently logged into Hotmail, logout and go back to hotmail.com again.
Step 2. Clear any previous username from the last session
(If this doesn’t apply to you, skip to step 3.)
If you just logged out or have logged into Hotmail recently, you will see the last known login name appear. Hover over your email address with your mouse, then click the small X at top right of the box:

Note that you may have to click this X twice to get rid of this box.
Step 3. Click the "Get a single use code to sign in with" text link at bottom.
The login form will look like this:

Step 4. Click the "Get one here" link.
You will be presented with this form:

Click the ‘Get one here’ text link.
Step 5. Enter your cell phone number and get a code
You will be presented with this form:

Enter your Hotmail email address, then your cell number, then click the "Send text message" button. Your code should arrive to your cell phone in less than 30 seconds.
After you receive your text with the code, you can login to Hotmail using your regular email address as your username, and the code as your password.
Why this is the absolute best mobile-style login
I know of no email that is more secure on login when mobile than Hotmail. Even if you’re on the most insecure unprotected Wi-Fi connection, you’re never giving your password out at any time. Once your code is used, it cannot be used again, and yes you can generate as many codes as you wish.
Even if you don’t use Hotmail as your primary email address, you may want to consider signing up for one when out and about. Hotmail can after all pull in email from any other accounts you may have, so it’s a darned good secondary email to have.
For the paranoid: If you’re worried about whether Microsoft will sell your cell phone number as personal information to telemarketers, they won’t. If you’re still saying "NO WAY!" to giving Microsoft your cell number for this type of secure login, you can always use a throwaway cell phone, available at any convenience store.
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