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Which Hash algorithm is being used by default in ASP.NET MVC 4 when using asp.net identity. How does it work? How secure is it?

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ASP.NET Identity uses PBKDF2. It is implemented using Rfc2898DeriveBytes.

This answere goes into some details of the how and why. This is a very broad question and the answer can span many many pages. Perhaps you can google about the specifics yourself. I tried googling and there is a ton you can read about depending on your level of curiosity.

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