(spawned from this thread since this is really a question of its own and not specific to NodeJS etc)
I'm implementing a REST API server with authentication, and I have successfully implemented JWT token handling so that a user can login through a /login endpoint with username/password, upon which a JWT token is generated from a server secret and returned to the client. The token is then passed from the client to the server in each authenticated API request, upon which the server secret is used to verify the token.
However, I am trying to understand the best practices for exactly how and to what extent the token should be validated, to make a truly secure system. Exactly what should be involved in "validating" the token? Is it enough that the signature can be verified using the server-secret, or should I also cross-check the token and/or token payload against some data stored in the server?
A token based authentication system will only be as safe as passing username/password in each request provided that it's equally or more difficult to obtain a token than to obtain a user's password. However, in the examples I've seen, the only information required to produce a token is the username and the server-side secret. Doesn't this mean that assuming for a minute that a malicious user gains knowledge of the server secret, he can now produce tokens on behalf of any user, thereby having access not only to one given user as would be the fact if a password was obtained, but in fact to all user accounts?
This brings me to the questions:
1) Should JWT token validation be limited to verifying the signature of the token itself, relying on the integrity of the server secret alone, or accompanied by a separate validation mechanism?
In some cases I've seen the combined use of tokens and server sessions where upon successful login through the /login endpoint a session is established. API requests validate the token, and also compare the decoded data found in the token with some data stored in the session. However, using sessions means using cookies, and in some sense it defeats the purpose of using a token based approach. It also may cause problems for certain clients.
One could imagine the server keeping all tokens currently in use in a memcache or similar, to ensure that even if the server secret is compromised so that an attacker may produce "valid" tokens, only the exact tokens that were generated through the /login endpoint would be accepted. Is this reasonable or just redundant/overkill?
2) If JWT signature verification is the only means of validating tokens, meaning the integrity of the server secret is the breaking point, how should server secrets be managed? Read from an environment variable and created (randomized?) once per deployed stack? Re-newed or rotated periodically (and if so, how to handle existing valid tokens that were created before rotation but needs to be validated after rotation, perhaps it's enough if the server holds on to the current and the previous secret at any given time)? Something else?
Maybe I'm simply being overly paranoid when it comes to the risk of the server secret being compromised, which is of course a more general problem that needs to be addressed in all cryptographic situations...