Dilemma of choosing either to hash or encrypt passwords - encryption

After reading some posts and articles online, it seems that most, if not all, people suggest using some sort of hashing algorithm for keeping a user's password safe, since you cannot unhash it, which is good, but that's where I begin to have a problem with my situation.
Right now I am in the early stages of modifying the way we secure our users' passwords. We currently store the hashed passwords in our MySQL DB using Sha512. With my current understanding, although hashes may be secure in the sense that they cannot be reverse (or at least not so easily), it is also insecure in that there are possible collisions, since a hash has a fixed length no matter the size of the original input, which limits the number of possible hashes, causing a possible Pidgeon Hole problem.
Now comes another part that I have a problem with, especially for my case.
I am trying add some features to our users' password where the user cannot enter a new password if it is too similar to, say, their last three passwords. Ex: if their last password was password1234 and their new one is xxxpasswordxxx, then it would fail. However, from my understanding, it is not possible for me to add this feature since I have no way of unhashing their previous passwords to check if any substring in their old passwords are in their new password. This brings me to the whole encryption/decryption part.
I have been looking at AES 128 using a CBC encryption mode and it seems like a solid choice, since I don't really care much for parallelization in the encrypted portion. Additioanlly, by using an encyption route instead of a hashing route, I can actually do that check to see if their last three passwords are similar to their current one! BUT, there is the whole problem of being able to see the users' plain text password in the first place.
Additionally, I have been trying to think of a way to use unique keys for every single password without storing it in our DB because I feel that is way too insecure. I could just use a static randomly key for ALL passwords, but I am not sure if that is a good idea either, even if I use unique IVs for all the passwords.
So to sum up my situation is this:
I want to be able to prevent the user from entering a password similar to their old one's, in addition to actually improving the security of our password storage. From the knowledge I have at the moment, I can either continue storing the passwords as a hash, but I won't be able to do the similar password check OR I can encrypt the passwords instead, which is something that is frowned upon.
I am clearly not an expert in this and I know for a fact I need to do some more research, but I want to make sure I am starting in the right direction.

Regarding the second paragraph: hash collisions are absolutely NOT a problem. For which attack scenario do you think that is a problem? You should really stop throwing buzzwords around, especially regarding security.
You are partially right that your feature idea would fail. And that is a good think because the idea is bad. Why do you want that "feature" - it will only annoy users and cause people try to circumvent your restrictions using numbers at the end including the month or some other incrementing from version to version.
And encrypting passwords is bad - period.
As soon as you can decrypt them, an attack can as well - end of story.
Personal experience of pretty much the scenario you are describing: The client has a tool where you are forced to change the password every 2 months, I am currently at "password"10. I am doing exactly what everybody is warning about when forcing password changes every X months - simply altering the same password piece by piece. I have a very good password (15+ characters, upper and lower case, numbers, special chars) plus a system for choosing a password for whatever site I am setting an account up for. Forcing me to change my password breaks my "system" because now I can no longer generate the password in my head over and over again because the outcome will not match what the site has forced me to set up after the first two months. If the site would start introducing some password similarity restrictions I would probably start writing them down.

Why not keep using hashing, but require that the user enters his or her old password when changing to a new password, that way you can authenticate the old password to authorize the password change, then compare the plain-text versions of both for similarity before proceeding with the change?

when you keep hashed passwords, you can not check for similar passwords, but you could prevent them from reusing a password they used before. By keeping the old (hopefully salted!) passwords, you can compare hash(new_password + old_salt[i]) with the salted_hash[i] of the old password. If they are the same, the user is reusing an old password.
I totally agree with the others that hash collisions are not a problem. You are planning to use SHA512, that is 512 bits of randomness the attacker has to compete with. The only way you could break that is by using rainbow tables and you protect yourself against them using the salted hashes (i.e. even if the password is the same, the salted hash will result in different hashes; it is not a problem if the attacker gets to know both the salt and the hash, so you can store salt + salted_hash in one location).
For security reasons I'd ditch the "similar password" thing altogether. If the attacker gets a bunch of passwords, changes are that there are a lot of bad passwords in your database. Using heuristics and dictionary attacks he will have a good change to guess your encryption key --> immediately unlocks all passwords of all users.
The only safe way for passwords is if the operator of the system storing them cannot recover them either. Anything else is just the next 0-day bug waiting to be exploited.

currently store the hashed passwords in our MySQL DB using Sha512
SHA-512 is too fast. Any attacker gaining access to your password hashes can very quickly run their password guesses through your hash. You need a slow algorithm so each guess takes them thousands of times longer. But as you need to hash these passwords too, you need to choose a value that won't overload your system, or arguably even worse, test your users' patience. Use either bcrypt (on its own) or PBKDF2 in combination with your SHA-512 (although SHA-1 HMAC is more than enough).
it is also insecure in that there are possible collisions
The collision resistance of SHA-512 is not a problem until you are approaching 2256 users within your system. As there are not even close to that number of people on the planet, I can safely say your system will be fine.
Dilemma of choosing either to hash or encrypt passwords
If you need a reason to go with the former, have a look at the details of the Adobe breach. They were encrypting passwords instead of hashing. TLDR; disaster. If your system is even moderately sized, you don't want anything like this being presented by the media regarding your system. Do things properly - use PBKDF2 or bcrypt - that way you are looking after your users using industry accepted methods and cannot then be criticised for your password storage scheme.
by using an encryption route instead of a hashing route, I can
actually do that check to see if their last three passwords are
similar to their current one
Well since the user will (hopefully) be entering their previous password as an additional authentication check in order to change their password, you could compare their passwords at this point as you will have them both in cleartext. For example
old password != new password
lowercase'd letters in old password != lowercase'd letters in new password
adding up all numbers in new password > adding up all numbers in old password + 2 || adding up all numbers in new password < adding up all numbers in old password - 2
And maybe some other rules you wish to define to prevent password similarity. If these rules are applied between changes from the first password to the second, and then the second password to the third, the user may get used to your rules and may be less likely to make their third password too similar to their first. You could also keep a password history table storing the bcrypt hashes of their previous X passwords (e.g. four), and do an absolute comparison to ensure they are not switching back to one they have previously used. I wouldn't keep more than four just in case any of their previous passwords are weak enough to crack and have been reused on other sites, because any breach on your system could potentially expose them, and also as mentioned checking these will be a slow process. You could however, going forward ensure that the user doesn't choose any password that has been involved in any breach by loading common passwords into a blacklist on your system.
Encryption of passwords is a bad idea, and the security benefit of fuzzy matching on all previous passwords does not outweigh the security risk of having two-way encryption active (in my opinion).

To keep password in a secret manner, you have to hash the password plus a salt.
For each user, you randomly choose a salt, you keep in database the salt for each user.
You store in database hash(password+salt).
When you have to check user's password, just add the salt, hash both and check against database.
If a user change the password, you can change the salt as well.
Aftewhile, you may choose an algorithm or another depending of the security level, SHA2 seems to be a good start.

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RDBMS Cryptography [duplicate]

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I am working on a project that has to have authentication (username and password)
It also connects to a database, so I figured I would store the username and password there. However, it seems like not such a good idea to have passwords as just a text field in a table sitting on the database.
I'm using C# and connecting to a 2008 express server. Can anyone suggest (with as many examples as possible) what the best way to store this type of data would be?
P.S I am open to the idea that this info not be stored in the database if a good reason can be provided
You are correct that storing the password in a plain-text field is a horrible idea. However, as far as location goes, for most of the cases you're going to encounter (and I honestly can't think of any counter-examples) storing the representation of a password in the database is the proper thing to do. By representation I mean that you want to hash the password using a salt (which should be different for every user) and a secure 1-way algorithm and store that, throwing away the original password. Then, when you want to verify a password, you hash the value (using the same hashing algorithm and salt) and compare it to the hashed value in the database.
So, while it is a good thing you are thinking about this and it is a good question, this is actually a duplicate of these questions (at least):
How to best store user information and user login and password
Best practices for storing database passwords
Salting Your Password: Best Practices?
Is it ever ok to store password in plain text in a php variable or php constant?
To clarify a bit further on the salting bit, the danger with simply hashing a password and storing that is that if a trespasser gets a hold of your database, they can still use what are known as rainbow tables to be able to "decrypt" the password (at least those that show up in the rainbow table). To get around this, developers add a salt to passwords which, when properly done, makes rainbow attacks simply infeasible to do. Do note that a common misconception is to simply add the same unique and long string to all passwords; while this is not horrible, it is best to add unique salts to every password. Read this for more.
Background
You never ... really ... need to know the user's password. You just want to verify an incoming user knows the password for an account.
Hash It:
Store user passwords hashed (one-way encryption) via a strong hash function.
A search for "c# encrypt passwords" gives a load of examples.
See the online SHA1 hash creator for an idea of what a hash function produces (But don't use SHA1 as a hash function, use something stronger such as SHA256).
Now, a hashed passwords means that you (and database thieves) shouldn't be able to reverse that hash back into the original password.
How to use it:
But, you say, how do I use this mashed up password stored in the database?
When the user logs in, they'll hand you the username and the password (in its original text)
You just use the same hash code to hash that typed-in password to get the stored version.
So, compare the two hashed passwords (database hash for username and the typed-in & hashed password). You can tell if "what they typed in" matched "what the original user entered for their password" by comparing their hashes.
Extra credit:
Question: If I had your database, then couldn't I just take a cracker like John the Ripper and start making hashes until I find matches to your stored, hashed passwords?
(since users pick short, dictionary words anyway ... it should be easy)
Answer: Yes ... yes they can.
So, you should 'salt' your passwords.
See the Wikipedia article on salt
See "How to hash data with salt" C# example (archived)
As a key-hardened salted hash, using a secure algorithm such as sha-512.
The best security practice is not to store the password at all (not even encrypted), but to store the salted hash (with a unique salt per password) of the encrypted password.
That way it is (practically) impossible to retrieve a plaintext password.
I'd thoroughly recommend reading the articles Enough With The Rainbow Tables: What You Need To Know About Secure Password Schemes [dead link, copy at the Internet Archive] and How To Safely Store A Password.
Lots of coders, myself included, think they understand security and hashing. Sadly most of us just don't.
I may be slightly off-topic as you did mention the need for a username and password, and my understanding of the issue is admitedly not the best but is OpenID something worth considering?
If you use OpenID then you don't end up storing any credentials at all if I understand the technology correctly and users can use credentials that they already have, avoiding the need to create a new identity that is specific to your application.
It may not be suitable if the application in question is purely for internal use though
RPX provides a nice easy way to intergrate OpenID support into an application.
In your scenario, you can have a look at asp.net membership, it is good practice to store user's password as hashed string in the database. you can authenticate the user by comparing the hashed incoming password with the one stored in the database.
Everything has been built for this purposes, check out asp.net membership
I would MD5/SHA1 the password if you don't need to be able to reverse the hash. When users login, you can just encrypt the password given and compare it to the hash. Hash collisions are nearly impossible in this case, unless someone gains access to the database and sees a hash they already have a collision for.

encrypting passwords & crypto questions

I've read a few articles about encrypting passwords and what I read seems that bcrypt is the way to go.
I know hardly any about cryptography, does it make any difference from the security point of view if I add the username to the password and hash that?
Also does it make sense to create a salt for each user? If my db would get leaked those salts would also be there, should I encrypt the salts too with a global salt?
Does it make sense to also encrypt the user's email adress?
Anywhat what I planned to do is:
+use bcrypt
+allow all characters in passwords
+force User to use a digit and special char in his password
+set the minimum password length to 8 chars
I'm not building an app which requires mega high security standards but I would like to offer my users some seriouse protection in case my DB gets leaked somehow. ( hopefully it won't )
does it make any difference from the security point of view if I add the username to the password and hash that
No added security, especially if you are already using a SALT. Has the drawback that you have to rehash and persist the hash each time a user changes their username.
Also does it make sense to create a salt for each user?
Yes, this is commonly done.
If my db would get leaked those salts would also be there, should I encrypt the salts too with a global salt?
No, do not encrypt them. The purpose of the SALT is just to force the attacker to have to perform a new brute force search for each user/password, instead of one brute force attack for all.
Does it make sense to also encrypt the user's email adress?
No. Unless you have some (strange) business requirement for that.
Kudos to you for asking the question before implementing. Unfortunately, that's the best point of optimism I have for you.
Security is hard to do right. Very hard to do right, in fact. If you don't know much about it, then don't try until you do. In the meantime, use a proven infrastructure that does this for you in the (hopefully) correct fashion. There should be one available for whatever framework you happen to be using, and if there isn't, that may be reason enough to switch.
That said, dont use the username for the salt, and don't bother encrypting the salt. You should also not be encrypting (or hashing) the user's email address, unless you or anyone else will never need to know it (as the maintainer(s) of the system). And adding the username to the password provides no benefit, and has several drawbacks, so don't do that either.
As far as a unique salt - this is a must. Without it, you might as well not have one. Read up a bit on encryption, hashing, and salting (and peppering) before proceeding. Even better, use a library that already does it for you as mentioned before.

How can I encrypt data with a password, but allow said password to be reset

I'm asking at a purely abstract level (no code required).
Some data is to be stored on a web-server/database on behalf of a user. The data is encrypted using the user's password as the key, ensuring that if the server or database is compromised, it is relatively useless to the attacker.
The problem is that the standard process of resetting a user's password (sending them a link with a token) won't work, because there is no way to decrypt and re-encrypt the data without knowing the previous password.
Are there any other ways around this?
When you say that you are willing to reset the password using some piece of automated authentication, then what you're really saying is that there are two passwords: the "normal" password and the "authentication" password. The solution to your problem is to encrypt the file using a random key and then encrypt the key using each of the passwords.
As a concrete example:
User provides a password "Aw3som1"
User also provides his high school mascot: "the Chipmunks"
Just to make it really complete, let's assume your authentication scheme is very forgiving like many are. You would accept just "chipmunks" (or "CHIPMUNKS" or maybe even "chipmunk") rather than "the Chipmunks." But whatever it is, your scheme must be deterministic. Every possible answer you will accept must resolve to the same hash. In this case, I'm going to assume that you lowercase the security answer, remove articles, and reduce to singular if it's plural. Then you prepend the class of question. So your secondary password is something like "mascot:chipmunk".
You now make up a random 16-bytes and use that key to encrypt the data. You then use normal password-based encryption techniques (e.g. PBKDF2) to encrypt the key with each of your passwords above. Then you throw away the key and the passwords.
When you need to do a reset, decrypt the real key with the provided password ("mascot:chipmunk") and re-encrypt the key with the new password (and "mascot:chipmunk" again).
The one usability issue is that a password reset invalidates all the other security answers, and the user must reconfigure them all. If that's a problem, you could put all the security answers into a bundle and encrypt that using the same technique as the data. (i.e. the security answers are encrypted against all of the security answers.)
This approach of course creates two (or more) passwords that can unlock the data, and so dramatically drops brute-force search time. You should consider that when scaling things. That said, your safety margins should generally be several orders of magnitude, so even a few passwords should be workable for many situations. Remember also that the security questions live in a tiny key space, particularly things like "mascot" or "make of car" which probably only have a few dozen likely values (unless you went to my high school which had a truly bizarre mascot…) That just means that aggressively tuning PBKDF2 is even more important.
Of course the existence of any kind of password reset system is going to make targeted attacks much easier. But that's true no matter how you implement the encryption.
But what if there isn't even a security question? What if you'll reset the password based on an email address alone? Well, then the email address is the password. That's problematic in the face of a stolen database, and it's hard to fix because there is no real secret (and encryption requires a secret). But all is not completely lost. One thing you can do is to never include the actual email address in the database. Think of the email address as a password (since it is in this case). Store a hash. You can't use a random salt on it, but you could still use some single salt for the whole database.
So my email is test#example.com. You treat that as a password, salt it with "mygreatservice" and run it through PBKDF2. To login, just treat it like a password again.
An attacker, though, has to guess email addresses one at a time. That's not incredibly hard, but he can't just decrypt the entire database in one go, and he'll never get the data from emails he doesn't guess. (And you did choose a really easy reset mechanism.)
Why do you need to un-encrypt the password? If they have forgotten then you will have to verify them based on the fact they had access to the email account where the reset token was sent. Ideally you would include some other form of question/proof of identity on the reset page like a secret question.
Also, you're best not storing the password using reversible encryption but instead using a strong salted hash which is one way.

Include an encrypted password in a URL? Possible?

We have a typical web-based login system. We want customers to have the ability to generate a "login link" that doesn't ever expire and includes their password.
We want to therefore create a link which includes their password in encrypted form.
NOTE: I know the best way is a lookup table where each link has a unique key... I won't go into why that won't work for us; it won't.
I'm not familiar with public key encryption.. Maybe that's what I need?
Here's what I'm thinking. This still might not be enough, so please let me know:
Definition: user-password refers to the user's password that we want in encrypted form in the link.
We cannot use one encryption key for all user-passwords because it may be possible to derive the encryption key by generating tons of links, so...
Use a standard form of symmetric encryption.
The server has a text file with 1000 complex encryption keys.
When a link is generated (using the PHP script that has that list), one of the 1000 encyption keys is chosen to encrypt their plaintext password (chosen in sequence, not at random to prevent the same from being chosen close to the same time).
Before encrypting the user's password, add something like "s345lm34l5k342342343534432324sdfs" to the start of it, to "salt" it. (Ex: password1 becomes s345lm34l5k342342343534432324sdfspassword1). "Salting" makes it harder to decrypt against dictionary attacks. This salt is kept private. But, of course, there's the risk it can be compromised and it's one salt for all passwords, so...
In addition, there's a second randomly generated salt added to the password. This salt is encrypted with a single strong password. Because both the salt and the password encrypting it is a random pattern of bytes, it makes it harder to determine the salt.
The link maker tool only lets you generate 15 links every 10 minutes, and then locks out the IP.
The link maker tool doesn't not generate links unless the user/password provided to it is actual a functioning user/password combination. That way, if someone is just try to generate links to determine the encryption info, it won't work. Still, theoretically, they could obtain a valid user/password and try to brute force.
Is this secure?
No, because the encrypted password has become the password. Have you tried SSL? SSL should solve your problems, you can just use a plain URL on HTTP level.

How should I store usernames/password for automated authentication?

An organization I work for has a few different websites they use on a daily basis. I've been asked to develop a web application (using ASP.NET) that can access/synthesize information from these and display it in one location. Unfortunately, one of the websites does not support OAuth or anything similar, so I need to store their login credentials in a database.
My first thought was to use their credentials for my site as a key to encrypt their credentials for the remote site. For example: Bob logs in to my website with the password hunter2. Using that password, I decrypt Bob's credentials for www.example.com and log in as Bob there. Since I don't need to access example.com unless Bob is on my site, I can discard the decrypted credentials once he's done.
My assumption that simply using hunter2 (or whatever Bob's password is) isn't enough and that there is a "standard" way that I haven't been able to find on Google or Stack Overflow.
If you can't avoid storing the passwords on the server, then encrypting with the user's "master" password (e.g. "hunter2") is your best bet. No other approach offers protection in the event that the server is compromised. Now... how much protection you get hinges entirely on the complexity of the user's master password. I'll offer my analysis of the security of this scheme at the end, but before that, let me review the pitfalls to avoid.
First—and I assume that you already know this, but—you must not store the user's master password anywhere. Ok, with assumptions out of the way...
Do not use the user's actual password as the key to the encryption function.
Consider what would be possible if you did: what if an attacker managed to download your entire users table, complete with encrypted example.com passwords? We all know that user chosen passwords are easy to guess. What would stop the attacker from repeatedly decrypting the encrypted example.com password, trying 40 million commonly used passwords as the key, discarding any result that doesn't look like a password (that is, the decrypted result does not appear in the wordlist)? AES is designed to be fast. While not an apples to apples comparison, a sense of the speed of AES should be imparted when you consider that an encrypted version of the aforementioned 500mb wordlist could be decrypted in about one second on modern hardware. Worse yet, the attacker would not only get the example.com password, they would also have the key used for encryption, or in other words, the user's master password!
That, in a nutshell, is why you need to use a key derivation function (KDF). A KDF will ideally protect you in three ways:
Require a non-trivial amount of time to compute each key. A user can wait one second for the server to turn their password into a key. An attacker may be less inclined to wait 40,000,000 seconds—see analysis below.
Salt the password. Without salt, an attacker could brute-force the entire users table in one pass, not to mention make a space-time tradeoff.
Prevent recovery of the master password, even if the attacker recovers the encryption key.
One such KDF that provides all three is PBKDF2. Conveniently, there is an implementation built in to .NET:
public static byte[] DeriveKey(int keyBitSize, string password, byte[] salt) {
const int iterations = 1<<12; // Once set, any change will break decryption.
using (var kdf = new Rfc2898DeriveBytes(password, salt, iterations)) {
return kdf.GetBytes(keyBitSize);
}
}
Analysis
40 million seconds is less than 500 days. Since wordlists are usually ordered with the most commonly used passwords first, the attacker has a good chance of finding the password in significantly less than half the time it takes to try the entire wordlist. As a final wrinkle, it is possible to try keys in parallel: a 500-node botnet could try the entire wordlist in a day.
That's the problem with relying on the user's password for encryption security. You can choose to accept this risk or you can decide not to store the user's password on the server. If you decide to store encrypted passwords on the server, you can mitigate the risk by increasing the complexity requirements for the user's master password.
Whatever approach you take will have issues that will leave you doubting yourself. You need to balance the solutions against your environment & see what best fits.
Will each user of your app have an account on the remote system? How are users authenticated by your system? Will your app run in a trusted environment (eg corporate network).
I wrote a similar app to front an internal system that had it's own username & passwords. My app used Windows Integrated auth to figure out who the user was. it then asked for their password to the remote system & encrypted that value using a hard-coded key & stored the value in the DB. It could then retrieve the value, decrypt it & supply it to the remote system when needed.
Now in a non-trusted environment, someone could obtain my binaries & work out what they key was & get all the passwords. That would be bad. But on a corporate network, if they did that, they should come & work for me.
You already have access to the user's clear-text secondary passwords, so regardless of whether or not you throw away the encryption key, you're still responsible for their safety when it is in the clear. Keep that in mind when you handle the passwords.
If you use the user's own password to encrypt, you are reducing the strength of all their secondary passwords to the strength of the primary one. This is probably bad since a) user passwords are notoriously weak already (I know, why do we even bother in the first place?) and b) even with the strongest of passwords, it still won't match the strength of a solidly random 256 bit AES key.
My suggestion is to consider having a single AES key that encrypts their clear-text secondary passwords. Then, guard the AES key well. It may make sense, instead to have a root AES key that encrypts many sub-keys, one for each user. You'll have to do a risk analysis, I suppose.

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