Question: How should passwords be stored?

1. Passwords should be hashed using an adaptive one-way function such as bcrypt.
2. Passwords can be stored in a BASE64 encoded format if they are stored in a private database.
3. Passwords should be salted and hashed using the MD5 algorithm.
4. Passwords should be hashed using the SHA-1 algorithm, then salted to provide defence against rainbow table attacks.

Answer: The correct answer of the above question is Option A:Passwords should be hashed using an adaptive one-way function such as bcrypt.