A two-factor network authentication system uses “something you know” in the form of a password/Pin and “something you have” in the form of a key token. The password is encrypted in a secure area of the USB device and is protected from brute force attacks. The key token includes authentication credentials. Users cannot authenticate without the key token. Four distinct authentication elements that the must be present. The first element is a global unique identifier that is unique to each key. The second is a private credential generated from the online service provider that is stored in a secure area of the USB device. The third element is a connection profile that is generated from the online service provider. The fourth element is a credential that is securely stored with the online service provider. The first two elements create a unique user identity. The second two elements create mutual authentication.