I have a small community website and I need to implement some sort of forgotten password function. I currently store the passwords in the DB, encrypted with MD5
.
Is it possible to sort of 'decrypt' and send it to user via email or would I need to have a password reset page?
An MD5 hashed password is not reversible. (MD5 is hashing, and not really encrypting, so there's a subtle difference). And yes you'll definitely want to provide a password "reset" process (and not simply email the password).
To give you a high level workflow for secure password resets...
To give you a little more detail into hashing...
When you hash a value like a password using the md5() function in PHP, the final value is going to be the same for that password no matter which server you run it on. (So there's one difference we can see right away between hashing and encryption... There's no private/public key involved).
So this is where you'll see people mention a vulnerability to rainbow tables. A very basic explanation of a rainbow table is... You md5() hash a bunch of dictionary words (weak passwords) in order to get their md5() hashed values. Put those in a database table (rainbow table).
Now, if you compromise a web site's database, you can run the users' hashed passwords against your rainbow table to (in essence) "reverse" the hash back to a password. (You're not really "reversing" the hash... But you get the idea).
That's where "salting" your passwords is best practice. This means (again, very basic idea here) that you append a random value to the users' passwords before you hash it. Now, when the rainbow table is run against your database, it's not as easily "reversed" because the md5() hash of "password" is different than "password384746".
Here's a nice SO Q/A that should help. Secure hash and salt for PHP passwords