Is there anything available that isn't trivially breakable?
To protect passwords, experts suggest using a strong and slow hashing algorithm like Argon2 or Bcrypt, combined with salt (or even better, with salt and pepper). (Basically, avoid faster algorithms for this usage.) To verify file signatures and certificates, SHA-256 is among your best hashing algorithm choices.
Probably the one most commonly used is SHA-256, which the National Institute of Standards and Technology (NIST) recommends using instead of MD5 or SHA-1. The SHA-256 algorithm returns hash value of 256-bits, or 64 hexadecimal digits.
Choosing a slow algorithm is actually preferred for password hashing. Of the hashing schemes provided, only PBKDF2 and Bcrypt are designed to be slow which makes them the best choice for password hashing, MD5 and SHA-256 were designed to be fast and as such this makes them a less than ideal choice.
The reason why SHA-512 is faster than SHA-256 on 64-bit machines is that has 37.5% less rounds per byte (80 rounds operating on 128 byte blocks) compared to SHA- 256 (64 rounds operating on 64 byte blocks), where the operations use 64-bit integer arithmetic.
This 2008 answer is now dangerously out of date. SHA (all variants) is now trivially breakable, and best practice is now (as of Jan 2013) to use a key-stretching hash (like PBKDF2) or ideally a RAM intensive one (like Bcrypt) and to add a per-user salt too.
Points 2, 3 and 4 are still worth paying attention to.
See the IT Security SE site for more.
Original 2008 answer:
Use a proven algorithm. SHA-256 uses 64 characters in the database, but with an index on the column that isn't a problem, and it is a proven hash and more reliable than MD5 and SHA-1. It's also implemented in most languages as part of the standard security suite. However don't feel bad if you use SHA-1.
Don't just hash the password, but put other information in it as well. You often use the hash of "username:password:salt" or similar, rather than just the password, but if you play with this then you make it even harder to run a dictionary attack.
Security is a tough field, do not think you can invent your own algorithms and protocols.
Don't write logs like "[AddUser] Hash of GeorgeBush:Rep4Lyfe:ASOIJNTY is xyz"
First rule of cryptography and password storage is "don't invent it yourself," but if you must here is the absolute minimum you must do to have any semblance of security:
Cardinal rules:
Steps:
Oh, and unless you are running SSL or some other line security then don't allow your password to be transmitted in plain text. And if you are only comparing the final hash from the client to your stored hash then don't allow that to be transmitted in plain text either. You need to send a nonce (number used once) to the client and have them hash that with their generated hash (using steps above) hash and then they send you that one. On the server side you run the same process and and see if the two one time hashes match. Then dispose of them. There is a better way, but that is the simplest one.
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