composer: Can't authenticate

I created an account on Packagist.org. When I try to php composer.phar install, I get the prompt:

Authentication required (packagist.org):
  Username: SuperSecret
  Password:

The prompt repeats indefinitely, regardless of how many times I type in the correct password.

Also, I must admit I am confused why authentication is needed to download a package in the first place.

Edit: I am behind a proxy, but am skeptical about setting an environment variable containing my password ala this.