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RADIUS is a protocol for remote user authentication and accounting that enables centralized management of authentication data, such as usernames and passwords.
When a user attempts to login to a RADIUS client, such as a router, the router send the authentication request to the RADIUS server, which is usually a hard-wired machine on the network. The communication is authenticated and encrypted through the use of a shared secret, which is not transmitted. It consistently protects against a sniffing, active attacker where other remote authentication protocols provide either intermittent, inadequate or non-existent protection.
RADIUS utilizes the MD5 algorithm for secure password hashing.
In depth discussion here: »www.untruth.org/~josh/security/r···uth.html