> You could expand upon that system by having it only check the 2nd, 5th, 10th, Nth etc. characters A bank I use does something like this. On account creation

> You could expand upon that system by having it only check the 2nd, 5th, 10th, Nth etc. characters A bank I use does something like this. On account creation you give it a long key string and on subsequent log-in it asks for three different characters (e.g. the 4th, 3rd and 9th characters) from the string.