Peer Authentication

Local connections based on OS user

Password Authentication

The password-based authentication methods are md5 and password. These methods operate similarly except for the way that the password is sent across the connection, namely MD5-hashed and clear-text respectively.

If you are at all concerned about password "sniffing" attacks then md5 is preferred. Plain password should always be avoided if possible. However, md5 cannot be used with the db_user_namespace feature. If the connection is protected by SSL encryption then password can be used safely (though SSL certificate authentication might be a better choice if one is depending on using SSL).

Bibliography