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Hashing passwords for storage is standard practice in all systems that involve password based authentication.

Even then, the password must reside in memory at some point in order to compute the hash of your password [using bycrypt or whatever scheme], which is necessary for both generating the hash the first time AND generating the hash for authentication attempts. This is the issue described in the given link.

http://en.wikipedia.org/wiki/Cryptographic_hash_function#Pas...



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