Database administrators should use the following guidelines to keep passwords secure.
MySQL stores passwords for user accounts in the
mysql.user table. Access to this table should
never be granted to any nonadministrative accounts. Passwords in
the user table are stored in encrypted form,
but in versions of MySQL earlier than 4.1, knowing the encrypted
password for an account makes it possible to connect to the
server using that account.
Passwords can appear as plain text in SQL statements such as
GRANT and
SET PASSWORD, or statements that
invoke the PASSWORD() function.
If these statements are logged by the MySQL server, the
passwords become available to anyone with access to the logs.
This applies to the general query log, the slow query log, the
update log, and the binary log (see
Section 5.3, “MySQL Server Logs”). To guard against unwarranted
exposure to log files, they should be located in a directory
that restricts access to only the server and the database
administrator.
Replication slaves store the password for the replication master
in the master.info file. Access to this
file should be restricted to the database adminstrator.
Database backups that include tables or log files containing passwords should be protected using a restricted access mode.

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