How to Protect Sensible Passwords stored in a Database?

The usual way to do this is to use an symmetric encryption key which is derived from the user's password. The standard way to do this is using the algorithm specified in RFC2898 which generates a set of cryptographically secure bytes you can use as a key and IV. It's probably supported by a library for your language, .

NET for example, which is what I use has the Rfc2898DeriveBytes class.

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