Serious Security: MD5 considered harmful – to the tune of $600,000

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The reason for a salt is simple: it ensures that the hash values of potential passwords cannot be calculated in advance and then brought along to help with an attack. We can’t be sure what fine would have been imposed if the judgment had involved poor hashing only, and EDF hadn’t also had to answer for the three other data protection offences listed at the start……but it does go to show that bad cryptographic choices can cost you money in more ways than one! As you will have heard many times on Naked Security, storing the cryptographic hash of a password means that you can validate a password when it is presented simply by recomputing its hash and comparing it with the hash of the password that was originally chosen.

Source read time: 6 min - nakedsecurity.sophos.com

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