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Today I Learned

macOS asks for a PIN instead of a password

Whenever you try to athenticate macOS asks for a PIN instead of a password. This happens if you paired your key at some point with macOS.

Just open Terminal.app and unpair it:

sudo /usr/sbin/sc_auth unpair -u YourUserName

or simply

sudo /usr/sbin/sc_auth unpair

Take out your key if you have it plugged in and reboot.

Your key should be unpaired from your username. Remember you don't have to pair your key to use it. You only have to pair it if you want to use it for macOS authentication.