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Java question - Encrypting a File, Protecting Password over network

Java has standard crypto libraries.

For the first part, you can do something as simple as keeping a flat file with SHA1 hashes of the authentication strings. Look up the MessageDigest class. Core Java, Volume 2 covers this and other fundamental cryptography.

As for securing network traffic, you can use secure sockets from the standard JSSE library (an implementation of TLS/SSL).

The bolded keywords can be further explored with Google or at http://java.sun.com
 
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