Atm client (A) sends to lobby server (B) plain hash of PW - lets call it "PW" because hash can be reversed using rainbow tables.
Server stores that hash in DB.
I would like to change that so that server stores for each account:
salt, hash (salt+PW) - salt being random stuff
and login works this way:
B->A: token (random string), salt
A->B: hash(hash(salt+PW)+token)
That way outside "register" no PW is transmitted or stored.
To secure "register" would need assymetrical cipher like RSA but I think it's ok to send plain hash once for registration .. Database and ordinary traffic will be safe.