Final answer:
Prior to Windows 8.1, password hashes in Windows systems were stored in the SAM database and often used a weak encryption scheme known as LM hash, which could be easily decrypted. Tools like Ophcrack could exploit this weakness. Windows 8.1 improved password security by removing LM hashes and enhancing protection measures.
Step-by-step explanation:
Password Storage in Pre-Windows 8.1 Systems
Prior to Windows 8.1, the operating system used a feature called Local Security Authority Subsystem Service (LSASS) to manage local user logins. Specifically, Windows 7 and earlier versions stored password hashes in the Security Accounts Manager (SAM) database, which could be found in the registry file SAM under the system32/config directory. These password hashes, while encrypted, utilized a relatively weak protection scheme known as LAN Manager (LM) hash, which made them susceptible to brute-force attacks and thus could be easily extracted and decrypted with the appropriate tools.
Over time, Windows began using NTLM, a more secure hashing algorithm, but legacy support meant that LM hashes were still generated and stored. This legacy feature often became a target for attackers looking to gain unauthorized access to older systems. Tools like Ophcrack and rainbow tables were commonly used by security professionals and malicious actors alike to crack these weakly-protected passwords.
With the release of Windows 8.1, Microsoft introduced improvements such as the removal of the LM hash and strengthened security measures around the storage and transmission of user credentials. These changes made it more difficult to extract and decrypt passwords, thus enhancing the overall security of the operating system.