Allow localsystem access to sql server?

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I have a service which runs as localsystem and should get access to a sql server. But i'am not sure which authentication method would be the best.

For normal user access microsoft recommends window authentication. Since the service runs with extended privileges would it be more secure to switch to the sql authentication?

On the other hand for sql authentication, i would have to save the sql credential at the service and i also could not use kerberos.

Or are there not even any downside of running as localsystem?

Source Microsoft

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