The well known hash functions MD5 and SHA1 should be avoided in new applications. Collission attacks against MD5 are well documented in the cryptographics literature and have already been demonstrated in practice. Therefore, MD5 is no longer secure for certain applications.



Collission attacks against SHA1 have also been published, though they still require computing power, which is somewhat out of scope. As computing power increases with time and the attacks are likely to get better, too, attacks against systems relying on SHA1 for security are likely to become feasible within the next few years.



There is no lack of potential alternative hash algorithms, as the many choices for the "algo" argument of PHPs hash() function already suggests. Unfortunately, there is lack of analysis, as to how secure these alternative algorithms are. It is rather safe to assume, though, that the SHA2 family with its most prominent members SHA-256 und SHA-512, is better than SHA1.



When storing password hashes, it is a good idea to prefix a salt to the password before hashing, to avoid the same passwords to hash to the same values and to avoid the use of rainbow tables for password recovery. Unlike suggested in other articles, there is no security advantage in putting the salt in the middle, or even at both the beginning and the end, of the combined salt-password-string.



Rather, there are two other factors, that determine the strength of the salt: Its length and its variability. For example, using the same salt for all passwords is easy to implement, but gives only very little additional security. In particular, if users type the same passwords, they will still hash to the same value!



Therefore, the salt should be random string with at least as many variable bits, as there are bits in the hash result. In the user database, store username, the randomly generated salt for that user, and the result of hashing the salt-password-string. Access authentication is then done by looking up the entry for the user, calculating the hash of the salt found in the database and the password provided by the user, and comparing the result with the one stored in the database.