Over the last few years, I've talked with a few experts in the field of digital communication security. The password issue issue is a problem they often talk about; what they usually are aiming towards instead is a way of identifying the particular computer or phone that is in operation. Then, even if you had the password, you couldn't call in without the right phone as well: the other phones wouldn't accept your connection.
There's a lot going on in the field, and I think we'll see some pretty major advances over the next year or so. I doubt it will end the hacking, though: it will make it much harder, but a lot of hackers are motivated chiefly by the challenge. Others, of course, like knowing secrets, and still others like to pull pranks on authority figures. I've met a few good ones, though, whose real interest was just in doing something that was supposed to be impossible.
One fellow I knew got a job with a major corporation as the head of computer security for their nuclear facilities by hacking into their database and scheduling a job interview for himself. They were very confused when he showed up for it, apologizing that they didn't seem to have any of the usual paperwork on hand, and weren't sure why an interview had been scheduled without the usual process of review. After he explained how the interview had gotten scheduled, they hired him.
The story reminds me of that of philosopher and logician Saul Kripke, who was hired as a professor of philosophy without any degree in philosophy at all.
While still a teenager he wrote a series of papers that eventually transformed the study of modal logic. One of them, or so the legend goes, earned a letter from the math department at Harvard, which hoped he would apply for a job until he wrote back and declined, explaining, "My mother said that I should finish high school and go to college first."
The college he eventually chose was Harvard. "I wish I could have skipped college," Mr. Kripke said in an interview. "I got to know some interesting people, but I can't say I learned anything. I probably would have learned it all anyway, just reading on my own."
While still a Harvard undergrad, Mr. Kripke started teaching post-graduates down the street at the Massachusetts Institute of Technology, and after getting his B.A. didn't bother to acquire an advanced degree. Who could teach him anything he didn't already know? Instead, he began teaching and publishing.Princeton hired him as a professor, even though their usual standards required a doctorate as a minimum prerequisite. It was a good decision.