security - Encrypting/Hashing plain text passwords in database

Question

I've inherited a web app that I've just discovered stores over 300,000 usernames/passwords in plain text in a SQL Server database. I realize that this is a Very Bad Thing?.

Knowing that I'll have to update the login and password update processes to encrypt/decrypt, and with the smallest impact on the rest of the system, what would you recommend as the best way to remove the plain text passwords from the database?

Any help is appreciated.

Edit: Sorry if I was unclear, I meant to ask what would be your procedure to encrypt/hash the passwords, not specific encryption/hashing methods.

Should I just:

1. Make a backup of the DB
2. Update login/update password code
3. After hours, go through all records in the users table hashing the password and replacing each one
4. Test to ensure users can still login/update passwords

I guess my concern is more from the sheer number of users so I want to make sure I'm doing this correctly.

Answer 1

EDIT (2016): use Argon2, scrypt, bcrypt, or PBKDF2, in that order of preference. Use as large a slowdown factor as is feasible for your situation. Use a vetted existing implementation. Make sure you use a proper salt (although the libraries you're using should be making sure of this for you).

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When you hash the passwords use DO NOT USE PLAIN MD5.

Use PBKDF2, which basically means using a random salt to prevent rainbow table attacks, and iterating (re-hashing) enough times to slow the hashing down - not so much that your application takes too long, but enough that an attacker brute-forcing a large number of different password will notice

From the document:

• Iterate at least 1000 times, preferably more - time your implementation to see how many iterations are feasible for you.
• 8 bytes (64 bits) of salt are sufficient, and the random doesn't need to be secure (the salt is unencrypted, we're not worried someone will guess it).
• A good way to apply the salt when hashing is to use HMAC with your favorite hash algorithm, using the password as the HMAC key and the salt as the text to hash (see this section of the document).

Example implementation in Python, using SHA-256 as the secure hash:

EDIT: as mentioned by Eli Collins this is not a PBKDF2 implementation. You should prefer implementations which stick to the standard, such as PassLib.

from hashlib import sha256
from hmac import HMAC
import random

def random_bytes(num_bytes):
  return "".join(chr(random.randrange(256)) for i in xrange(num_bytes))

def pbkdf_sha256(password, salt, iterations):
  result = password
  for i in xrange(iterations):
    result = HMAC(result, salt, sha256).digest() # use HMAC to apply the salt
  return result

NUM_ITERATIONS = 5000
def hash_password(plain_password):
  salt = random_bytes(8) # 64 bits
  
  hashed_password = pbkdf_sha256(plain_password, salt, NUM_ITERATIONS)

  # return the salt and hashed password, encoded in base64 and split with ","
  return salt.encode("base64").strip() + "," + hashed_password.encode("base64").strip()

def check_password(saved_password_entry, plain_password):
  salt, hashed_password = saved_password_entry.split(",")
  salt = salt.decode("base64")
  hashed_password = hashed_password.decode("base64")

  return hashed_password == pbkdf_sha256(plain_password, salt, NUM_ITERATIONS)

password_entry = hash_password("mysecret")
print password_entry # will print, for example: 8Y1ZO8Y1pi4=,r7Acg5iRiZ/x4QwFLhPMjASESxesoIcdJRSDkqWYfaA=
check_password(password_entry, "mysecret") # returns True