A Friendly Approach to Hidding Passwords

I remember reading a few articles linked on BS's blog (http://www.schneier.com/blog/archives/2009/06/the_problem_wit_2.html) over the summer. And I remember writing... gee I have a good idea. (Which is now buried somewhere in the comments.) But now that I have my own space to express opinions:

I agree that the traditional methods of hiding passwords are useless. I don't agree that passwords should be shown in clear text. As one commenter writes: many of us use passwords in public locations where shoulder surfing is common and expected. However, black indistinguishable dots are horrible solutions.

It's interesting that the first comment on Bruce's blog rants about Lotus Notes. (Don't worry, I hate Notes too.) But I felt that Notes could have solved the problem. If you take a look here: (http://homepage.mac.com/bradster/iarchitect/lotus.htm) at the bottom the author criticizes the login prompt. When I used Notes I loved the changing picture next to my password. What the author fails to mention is that every time you type your password correctly, you'll see the same picture. (Many to one.) It told me if I had typed the wrong password.

And therein is my proposed solution/replacement to black dots. A picture representation.

Imagine a hash algorithm with 100 or so buckets. (Notes uses much fewer.) Each bucket gets assigned to a picture. After each character of the password is typed, the hash is applied, and a picture is chosen. In the end, if you typed your password correct you'll see a familiar picture; the one you saw last time you correctly entered your password.

This feature of Notes helped immensely when changing passwords too. Obviously this would result in a new picture. And as humans it's much easier to notice a change in picture (which would remind of the password change) than a "new" set of black dots.

This: (http://www.aleveo.com/ideas/human-passwords) is also a very neat idea, but off topic.