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  SQL Server Tips by Gama and Naughter

XP's as black boxes 

There are situations when it is necessary to encrypt data with a password transparently to the user. By storing the password hard coded in the DLL, a user could try to find it in the DLL or capture it by sniffing the data with SQL Server Profiler. A password that changes dynamically, either time or frequency based, is a better solution. This would not work with a stored procedure because the code would reveal the algorithm and its possible flaws or vulnerabilities would be exposed. This is security by obscurity but so is most, if not all, licensing schemes.

The above book excerpt is from:

Super SQL Server Systems
Turbocharge Database Performance with C++ External Procedures

ISBN: 0-9761573-2-2
Joseph Gama, P. J. Naughter


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