How to break Rainbowtables

So everybody knows about Rainbow tables and Ophcrack to break hashed passwords. So are all encrypted passwords breakable? Of course not. Matasano has a really great piece explaining the issues:

Here’s what you need to know about rainbow tables: no modern password scheme is vulnerable to them.

Rainbow tables are easy to beat. For each password, generate a random number (a nonce). Hash the password with the nonce, and store both the hash and the nonce. The server has enough information to verify passwords (the nonce is stored in the clear). But even with a small random value, say, 16 bits, rainbow tables are infeasible: there are now 65,536 “variants” of each hash, and instead of 300 billion rainbow table entries, you need quadrillions. The nonce in this scheme is called a “salt”. Cool, huh? Yeah, and Unix crypt —- almost the lowest common denominator in security systems —- has had this feature since 1976. If this is news to you, you shouldn’t be designing password systems. Use someone else’s good one.

The problem is that MD5 is fast. So are its modern competitors, like SHA1 and SHA256. Speed is a design goal of a modern secure hash, because hashes are a building block of almost every cryptosystem, and usually get demand-executed on a per-packet or per-message basis.

Speed is exactly what you don’t want in a password hash function.

To see some "good schemes" and the full explanation, check the full article at Matasano.