What is a GPG with "authenticate" capability used for?
OpenPGP keys can be used for authentication in various protocols:
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SSH, as bare ssh-rsa keys (
monkeysphere subkey-to-ssh-agent, or smartcards) -
SSH, as pgp-sign-rsa certificates (no implementations known to me)
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TLS according to RFC 5081 (supported by GnuTLS)
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of course, less well-known protocols and software such as gpgauth.org, Enigform, and such; they do find the "authentication" flag suitable.