How to create Processing challenges - security

I have an idea for my login and verification system but I'm wondering if its the correct idea or if its already been implemented somewhere else.
To try and mitigate some attacks, before login id like to propose a challenge to the client. So I'm thinking of proposing a computational challenge to the user. I need to somehow generate a problem or some kind of code that would take an average machine X seconds to process. With the answer being something that I could quickly calculate and check.
For instance, I know that hashing/encryption algorithms take time, perhaps I could use a simple encryption algorithm and generate some random short length password and a longer length key word. I then encrypt the keyword with the password, and send that to the client.
Then the client has to randomly guess/check the password and when it gets it, it sends me the key.
EXAMPLE:
Password:Foo
Length: 3
Answer: Bar
Keyword:123456
Output: encrypted(answer+keyword)->o3jubo3ibf32ib3o
SEND-> o3jubo3ibf32ib3o,Answer:Bar.
Then the client processes this and tries to come up with the password, guessing and checking if the first 3 letters = bar.
When it finds an answer, it sends me back a keyword and the password to check. I check if the keyword matches, if it does I continue, if it does not. I try to decrypt the challenge with the password they used to see if it does have the first 3 letters equal to the answer. If they ever give me a password that does not have the first 3 letters equal to the password- I blacklist the IP for 5 or so minutes and sever the connection.
Does this seem like it would work?
Has a library for this already been created?
Is there examples in c++ I can look at?
What would be the best encryption method for this approach?

Related

Login Credetials: Why not drop the username?

I was just about to write my hundredth login form when a thought crossed my mind: Why do I need a username?
A while ago my dad had to change his e-mail-address, and he still didn't figure out, why he can't log into various websites with his new address.
I'm also not a huge fan of individual per-site usernames. And wouldn't it be easier to remember only a password?
What are usernames good for? You obviously need some unique string to identify a user by. If you had just the password, that would work until a user picks a taken password and you would have to tell him “Sorry, 'GreatPassword123' already belongs to another user” — bad idea.
So part of the password needs to be unique. My idea: Predetermine the first three characters! You could choose from lower- and uppercase letters and digits, providing (26+26+10)^3 = 373,248 unique prefixes. At registration, the user would get a dialog, telling him that he only needs a password, and it starts with “N0i” for example, he has to pick the rest (“deaWhy” comes to mind). He can then log in with his password only, being “N0ideaWhy”, not knowing (or caring) that “N0i” actually is a unique username.
I see the following pros and cons:
Pros
independence from e-mail-addresses
user needs to remember just one string
might reduce password reuse
safe from leaked lists
faster login through fewer keystrokes
Cons
need to split the password-string and submit the first three characters unencrypted while hashing the rest
scalability comes to a dead stop at 373,248 users (or 26.8 million if you use four characters)
users might be skeptical / unexperienced / thrown off by not being able to reuse their standard password
I'm really wondering why nobody else did this so far? Are there any concerns that I missed?
By adding three random characters, you created a link between the password and the user, in other words a login. Beside the elements you mentionned, this login also has other problems:
it is much harder to remember (xhkr vs john.doe#example.com)
it cannot be unique across your services, even if you wanted to
you will need to request the email anyway in order to reset the password
What you are looking for has kinda been implemented already via social logins:
The idea is to use an independent service to handle your authentication. If every service owner would agree then you will end up with a unified login. It raises several concerns (lock-in, hack of the provider, personal data dissemination) but this is closest to what we came up with regarding centralized authentication (the grand father was OpenID): you just need to stay with one service (or a limited few).

How to make a document that can be validated by hand?

Here's a (simplified) example of my situation.
The user plays a game and gets a high-score of 200 points. I award high-scores with money, i.e. 1€/10 points. The user will print a "receipt" which says he won €20, then he gives it to me, I make sure the receipt is authentic and has never been used before and I hand him his prize.
My "issue" is in the bold part, obviously. I should be able to validate the "receipt" by hand, but solutions with other offline methods are welcome too (i.e. small .jar applications for my phone). Also, it must be hard to make fake receipts.
Here's what I thought so far, their pros and their cons.
Hashing using common algorithms i.e. SHA512
Pros: can easily be validated by mobile devices, has a strong resistance to faking it with higher values (if a context-depending salt is used, i.e. the username).
Cons: can be used multiple times, cannot be validated by hand.
Self-made hash algorithms
Pros: can be validated by hand.
Cons: might be broken easily, can be used multiple times.
Certificate codes: I have a list of codes in two databases, one on the server and one on my phone. Every time a receipt is printed, one of these is printed in it and set as "used" into the database. On my phone, I do the same: I check if the code is in the database and hasn't been used yet, then set as "used" in the database.
Pros: doesn't allow for multiple uses of the same code.
Cons: it's extremely easy to fake a receipt, cannot be validated by hand.
This sounds like a classic use case for an Hash-based message authentication code (HMAC) algorithm. Since your idea of "by hand" is "using a smartphone", not "with pecil, paper, and mind", you can compute the hash and print it on the receipt, and then validate it on the phone or the back-end server.
The "missing point" is to use more systems at once so that, together, they work in the needed way. In this case, we can use HMAC for authenticating the message and a list of "certificate codes" to make sure one doesn't use the same receipt over and over.
Another idea might also be to hash the time when the receipt is outputted to the client and print it on the receipt. When someone shows you the code on the receipt, you make sure that hash hasn't been used yet and that it's valid (i.e. the message produces that hash), then you add it to the list of "used hashes".
Thanks to #RossPatterson for suggesting HMAC.

How could one design a secure and "self-destructing" email?

As most of you know, email is very insecure. Even with a SSL-secured connection between the client and the server that sends an email, the message itself will be in plaintext while it hops around nodes across the Internet, leaving it vulnerable to eavesdropping.
Another consideration is the sender might not want the message to be readable - even by the intended recipient - after some time or after it's been read once. There are a number of reasons for this; for example, the message might contain sensitive information that can be requested through a subpoena.
A solution (the most common one, I believe) is to send the message to a trusted third party, and a link to the that message to the recipient, who then reads this message from the 3rd party. Or the sender can send an encrypted message (using symmetric encryption) to the recipient and send the key to the 3rd party.
Either way, there is a fundamental problem with this approach: if this 3rd party is compromised, all your efforts will be rendered useless. For a real example of an incident like this, refer to debacles involving Crypto AG colluding with the NSA
Another solution I've seen was Vanish, which encrypts the message, splits the key into pieces and "stores" the pieces in a DHT (namely the Vuze DHT). These values can be easily and somewhat reliably accessed by simply looking the hashes up (the hashes are sent with the message). After 8 hours, these values are lost, and even the intended recipient won't be able to read the message. With millions of nodes, there is no single point of failure. But this was also broken by mounting a Sybil attack on the DHT (refer to the Vanish webpage for more information).
So does anyone have ideas on how to accomplish this?
EDIT: I guess I didn't make myself clear. The main concern is not the recipient intentionally keeping the message (I know this one is impossible to control), but the message being available somewhere.
For example, in the Enron debacle, the courts subpoenaed them for all the email on their servers. Had the messages been encrypted and the keys lost forever, it would do them no good to have encrypted messages and no keys.
(Disclaimer: I didn't read details on Vanish or the Sybil attack, which may be similar the what comes below)
First of all: Email messages are generally quite small, esp. compared to a 50 mb youtube vid you can download 10 times a day or more. On this I base the assumption that storage and bandwidth are not a real concern here.
Encryption, in the common sense of the word, introduces parts into your system that are hard to understand, and therefore hard to verify. (think of the typical openssl magic everybody just performs, but 99% of people really understand; if some step X on a HOWTO would say "now go to site X and upload *.cer *.pem and *.csr" to verify steps 1 to X-1, I guess 1 in 10 people will just do it)
Combining the two observations, my suggestion for a safe(*) and understandable system:
Say you have a message M of 10 kb. Take N times 10 kb from /dev/(u)random, possibly from hardware based random sources, call it K(0) to K(N-1). Use a simple xor operation to calculate
K(N) = M^K(0)^K(1)^...^K(N-1)
now, by definition
M = K(0)^K(1)^...^K(N)
i.e. to understand the message you need all K's. Store the K's with N different (more or less trusted) parties, using whatever protocol you fancy, under random 256 bit names.
To send a message, send the N links to the K's.
To destroy a message, make sure at least one K is deleted.
(*) as regards to safety, the system will be as safe as the safest party hosting a K.
Don't take a fixed N, don't have a fixed number of K's on a single node per message (i.e. put 0-10 K's of one message on the same node) to make a brute force attack hard, even for those who have access to all nodes storing keys.
NB: this of course would require some additional software, as would any solution, but the complexity of the plugins/tools required is minimal.
The self-destructing part is really hard, because the user can take a screenshot and store the screenshot unencrypted on his disk, etc. So I think you have no chance to enforce that (there will always be a way, even if you link to an external page). But you can however simply ask the recipient to delete it afterwards.
The encryption is on the other hand is not a problem at all. I wouldn't rely on TLS because even when the sender and the client are using it, there might other mail relies who don't and they might store the message as plain text. So, the best way would be to simple encrypt it explicitly.
For example I am using GnuPG for (nearly) all mails I write, which is based on some asymmetric encryption methods. Here I know that only those I have given explicitly permission can read the mail, and since there are plug-ins available for nearly all popular MUAs, I'ts also quite easy for the recipient to read the mail. (So, nobody has to encrypt the mail manually and might forgot to delete the unencrypted message from the disk...). And it's also possible to revoke the keys, if someone has stolen your private key for example (which is normally encrypted anyway).
In my opinion, GnuPG (or alternatively S/MIME) should be used all the time, because that would also help to make spamming more difficult. But thats probably just one of my silly dreams ;)
There are so many different ways of going about it which all have good and bad points, you just need to choose the right one for your scenario. I think the best way of going about it is the same as your 'most common' solution. The trusted third party should really be you - you create a website of your own, with your own authentication being used. Then you don't have to give your hypothetical keys to anyone.
You could use a two way certification method by creating your own client software which can read the emails, with the user having their own certificate. Better be safe than sorry!
If the recipient knows that the message might become unreadable later and they find the message valuable their intention will be to preserve it, so they will try to subvert the protection.
Once someone has seen the message unencrypted - which means in any perceivable form - either as text or as screen image - they can store it somehow and do whatever they want. All the measures with keys and so one only make dealing with the message inconvenient, but don't prevent extracting the text.
One of the ways could be to use self-destructing hardware as in Mission Impossible - the hardware would display the message and then destroy it, but as you can see it is inconvenient as well - the recipient would need to understand the message from viewing it only once which is not always possible.
So given the fact that the recipient might be interested in subverting the protection and the protection can be subverted the whole idea will likely not work as intended but surely will make dealing with messages less convenient.
If HTML format is used, you can have the message reference assets that you can remove at a later date. If the message is open at a later date, the user should see broken links..
If your environment allows for it, you could use the trusted boot environment to ensure that a trusted boot loader has been used to boot a trusted kernel, which could verify that a trusted email client is being used to receive the email before sending it. See remote attestation.
It would be the responsibility of the email client to responsibly delete the email in a timely fashion -- perhaps relying on in-memory store only and requesting memory that cannot be swapped to disk.
Of course, bugs can happen in programs, but this mechanism could ensure there is no intentional pathway towards storing the email.
The problem, as you describe it, does sound very close to the problem addressed by Vanish, and discussed at length in their paper. As you note, their first implementation was found to have a weakness, but it appears to be an implementation weakness rather than a fundamental one, and is therefore probably fixable.
Vanish is also sufficiently well-known that it's an obvious target for attack, which means that weaknesses in it have a good chance of being found, publicised, and fixed.
Your best option, therefore, is probably to wait for Vanish version 2. With security software, rolling your own is almost never a good idea, and getting something from an established academic security group is a lot safer.
IMO, the most practical solution for the situation is using Pidgin IM client with Off-the-Record (no-logging) and pidgin-encrypt (end-to-end assymetric-encryption) together. The message will be destroyed as soon as the chat window is closed, and in emergency, you can just unplug the computer to close the chat window.

Is this method of checking a "gift code" secure?

I have a backend that generates gift codes, each with a certain number of uses. Give these to a blogger or whatever, and their readership can redeem the code for a promotional item.
I'm working on the best way to check a codes validity without having collisions/dupes, or anything like that. I need to 1) validate the code 2) collect shipping info
My first draft was
A) Check code via a form, if good, proceed to address input. When input is received, save code and address/name etc.
This fails because if there are 74 uses on a 75 use code, 25 people could "validate" but not enter their address yet, and we'd end up with more than 75 valid redemptions.
My current solution looks more like:
B) Just have the code as the first field in the information gathering form, and when a valid code is typed in, ajaxify that and live check it against the DB. If the code is valid, it then shows the rest of the form, and that entry of the code is "claimed" for half an hour or something. If no DB entry w/in half an hour, it's then released.
This seems pretty complex, and I'm wondering if I'd need to do throttling against the ajax attempts to make sure people don't brute force a valid code.
Is this method secure, and/or are there any other blatantly obvious patterns I'm missing for this type of application?
Let everyone enter their gift-code and address, and then submit
In the backend, verify the address and the gift-code.
If the gift-code is valid and not exhausted, congratulate the user. Else apologise to them and suggest they buy it instead anyway.
Does it have to be more complicated than that?
Why don't you just have one form with all the information (redemption code and shipping info)?
Then, when the user submits, atomically (using transactions on your database) check if it's valid and commit the user's information.
If the code is no longer valid, just show a message like "Sorry, the redemption code you used has been depleted and is no longer valid."
Just wanted to add, if you're worried about bruteforcing attempts, you can require a captcha or javascript based hashcash value to be submitted along with the gift code. If you want to be as unobtrusive as possible, you can only require this for subsequent attempts after the first failed one.
One thing you might consider, is after the user enters a gift code, create an intermediate page that has more details about the offer, shows the number of claims remaining, and has some information about what will be required to complete the offer (address, creditcard, whatever). If the user chooses to claim the offer, have a 10-15 minute countdown (updated via javascript) on the data entry page for the address and other personal information, so the user knows that the offer might expire if they don't enter their information immediately.
Another thing to consider is implementing a "cancel" button that indicates the user can make the offer available for another user, without waiting for the countdown to expire.
Your current solution looks like the proper one, although I think you left out the method by which you associate the user association with the code. Still, providing the functionality of "reserving" a redemption of the code for a user is a good solution.
Option B seems reasonable. Just use a captcha rather than trying to throttle it. Captchas aren't perfect but it's less obnoxious than say misreading the code three times and then being denied the ability to try another for 24 hours. This will work particularly well if you're already planning on doing it AJAXy.
So -
User will fill in code field and captcha.
You'll confirm the captcha, then confrim the code.
Once successful, the user will fill in the other info and submit.
Using this method you could also probably only lock the code for something more like 5 minutes (ticket agency style) and show a timer on the form somewhere notifying the user.
Your A method (Check code via a form, if good, proceed to address input) looks very reasonable. Just combine it with B's "code is "claimed" for half an hour or something", and everything should work as you expect.
That is:
Customer enters code
Check code – if valid, and not already used MAX+ times, add an extra entry in code use table, with a timestamp that expires after x minutes.
Collect other info
On submit, permanently mark the code as used (remove entry expiration)
If customer never makes the order, the timestamped entry is removed (or ignored) after time x, and released for others to use.
We do a low end encryption (RC4) with a checksum added for this type of thing. Because RC4 generates a problematic character set, we also converted it to HEX. The combination is relatively secure and self checking. The decrypted value is just a number that we can verify in the database. This works with both our eMail reminders and gift certificates.

Pin Generation

I am looking to develop a system in which i need to assign every user a unique pin code for security. The user will only enter this pin code as a means of identifying himself. Thus i dont want the user to be able to guess another users pincode. Assuming the max users i will have is 100000, how long should this pin code be?
e.g. 1234 4532 3423
Should i generate this code via some sort of algorithm? Or should i randomly generate it?
Basically I dont want people to be able to guess other peoples pincode and it should support enough number of users.
Am sorry if my question sounds a bit confusing but would gladly clarify any doubts.
thank you very much.
UPDATE
After reading all the posts below, I would like to add some more detail.
What i am trying to achieve is something very similar to a scratch card.
A user is given a card, which he/she must scratch to find the pin code.
Now using this pin code the user must be able to access my system.
I cannot add extra security (e.g. username and password), as then it will deter the user from using the scratch card. I want to make it as difficult as possible to guess the pincode within the limitations.
thankyou all for your amazing replies again.
4 random digits should be plenty if you append it to unique known userid (could still be number) [as recommended by starblue]
Pseudo random number generator should also be fine. You can store these in the DB using reversable encryption (AES) or one-way hashing
The main concern you have is how many times a person can incorrectly input the pin before they are locked out. This should be low, say around three...This will stop people guessing other peoples numbers.
Any longer than 6 digits and people will be forgetting them, or worse, writing them on a post-it note on their monitor.
Assuming an account locks with 3 incorrect attempts, then having a 4 digit pin plus a user ID component UserId (999999) + Pin (1234) gives you a 3/10000 chance of someone guessing. Is this acceptable? If not make the pin length 5 and get 3/100000
May I suggest an alternative approach? Take a look at Perfect Paper Passwords, and the derivatives it prompted .
You could use this "as is" to generate one-time PINs, or simply to generate a single PIN per user.
Bear in mind, too, that duplicate PINs are not of themselves an issue: any attack would then simply have to try multiple user-ids.
(Mileage warning: I am definitely not a security expert.)
Here's a second answer: from re-reading, I assume you don't want a user-id as such - you're just validating a set of issued scratch cards. I also assume you don't want to use alphabetic PINs.
You need to choose a PIN length such that the probability of guessing a valid PIN is less than 1/(The number of attempts you can protect against). So, for example, if you have 1 million valid PINs, and you want to protect against 10000 guesses, you'll need a 10-digit PIN.
If you use John Graham-Cumming's version of the Perfect Paper Passwords system, you can:
Configure this for (say) 10-digit decimal pins
Choose a secret IV/key phrase
Generate (say) the first million passwords(/PINs)
I suspect this is a generic procedure that could, for example, be used to generate 25-alphanumeric product ids, too.
Sorry for doing it by successive approximation; I hope that comes a bit nearer to what you're looking for.
If we assume 100,000 users maximum then they can have unique PINs with 0-99,999 ie. 5 digits.
However, this would make it easier to guess the PINs with the maximum number of users.
If you can restrict the number of attempts on the PIN then you can have a shorter PIN.
eg. maximum of 10 failed attempts per IP per day.
It also depends on the value of what you are protecting and how catastrophic it would be if the odd one did get out.
I'd go for 9 digits if you want to keep it short or 12 digits if you want a bit more security from automated guessing.
To generate the PINs, I would take a high resolution version of the time along with some salt and maybe a pseudo-random number, generate a hash and use the first 9 or 12 digits. Make sure there is a reasonable and random delay between new PIN generations so don't generate them in a loop, and if possible make them user initiated.
eg. Left(Sha1(DateTime + Salt + PseudoRandom),9)
Lots of great answers so far: simple, effective, and elegant!
I'm guessing the application is somewhat lottery-like, in that each user gets a scratch card and uses it to ask your application if "he's already won!" So, from that perspective, a few new issues come to mind:
War-dialing, or its Internet equivalent: Can a rogue user hit your app repeatedly, say guessing every 10-digit number in succession? If that's a possibility, consider limiting the number of attempts from a particular location. An effective way might be simply to refuse to answer more than, say, one attempt every 5 seconds from the same IP address. This makes machine-driven attacks inefficient and avoids the lockout problem.
Lockout problem: If you lock an account permanently after any number of failed attempts, you're prone to denial of service attacks. The attacker above could effectively lock out every user unless you reactivate the accounts after a period of time. But this is a problem only if your PINs consist of an obvious concatenation of User ID + Key, because an attacker could try every key for a given User ID. That technique also reduces your key space drastically because only a few of the PIN digits are truly random. On the other hand, if the PIN is simply a sequence of random digits, lockout need only be applied to the source IP address. (If an attempt fails, no valid account is affected, so what would you "lock"?)
Data storage: if you really are building some sort of lottery-like system you only need to store the winning PINs! When a user enters a PIN, you can search a relatively small list of PINs/prizes (or your equivalent). You can treat "losing" and invalid PINs identically with a "Sorry, better luck next time" message or a "default" prize if the economics are right.
Good luck!
The question should be, "how many guesses are necessary on average to find a valid PIN code, compared with how many guesses attackers are making?"
If you generate 100 000 5-digit codes, then obviously it takes 1 guess. This is unlikely to be good enough.
If you generate 100 000 n-digit codes, then it takes (n-5)^10 guesses. To work out whether this is good enough, you need to consider how your system responds to a wrong guess.
If an attacker (or, all attackers combined) can make 1000 guesses per second, then clearly n has to be pretty large to stop a determined attacker. If you permanently lock out their IP address after 3 incorrect guesses, then since a given attacker is unlikely to have access to more than, say, 1000 IP addresses, n=9 would be sufficient to thwart almost all attackers. Obviously if you will face distributed attacks, or attacks from a botnet, then 1000 IP addresses per attacker is no longer a safe assumption.
If in future you need to issue further codes (more than 100 000), then obviously you make it easier to guess a valid code. So it's probably worth spending some time now making sure of your future scaling needs before fixing on a size.
Given your scratch-card use case, if users are going to use the system for a long time, I would recommend allowing them (or forcing them) to "upgrade" their PIN code to a username and password of their choice after the first use of the system. Then you gain the usual advantages of username/password, without discarding the ease of first use of just typing the number off the card.
As for how to generate the number - presumably each one you generate you'll store, in which case I'd say generate them randomly and discard duplicates. If you generate them using any kind of algorithm, and someone figures out the algorithm, then they can figure out valid PIN codes. If you select an algorithm such that it's not possible for someone to figure out the algorithm, then that almost is a pseudo-random number generator (the other property of PRNGs being that they're evenly distributed, which helps here too since it makes it harder to guess codes), in which case you might as well just generate them randomly.
If you use random number generator algorithms, so you never have PIN like "00038384882" ,
starts with 0 (zeros), because integer numbers never begins with "0". your PIN must be started with 1-9 numbers except 0.
I have seen many PIN numbers include and begins many zeros, so you eliminate first million of numbers. Permutation need for calculations for how many numbers eliminated.
I think you need put 0-9 numbers in a hash, and get by randomly from hash, and make your string PIN number.
If you want to generate scratch-card type pin codes, then you must use large numbers, about 13 digits long; and also, they must be similar to credit card numbers, having a checksum or verification digit embedded in the number itself. You must have an algorithm to generate a pin based on some initial data, which can be a sequence of numbers. The resulting pin must be unique for each number in the sequence, so that if you generate 100,000 pin codes they must all be different.
This way you will be able to validate a number not only by checking it against a database but you can verify it first.
I once wrote something for that purpose, I can't give you the code but the general idea is this:
Prepare a space of 12 digits
Format the number as five digits (00000 to 99999) and spread it along the space in a certain way. For example, the number 12345 can be spread as __3_5_2_4__1. You can vary the way you spread the number depending on whether it's an even or odd number, or a multiple of 3, etc.
Based on the value of certain digits, generate more digits (for example if the third digit is even, then create an odd number and put it in the first open space, otherwise create an even number and put it in the second open space, e.g. _83_5_2_4__1
Once you have generated 6 digits, you will have only one open space. You should always leave the same open space (for example the next-to-last space). You will place the verification digit in that place.
To generate the verification digit you must perform some arithmetic operations on the number you have generated, for example adding all the digits in the odd positions and multiplying them by some other number, then subtracting all the digits in the even positions, and finally adding all the digits together (you must vary the algorithm a little based on the value of certain digits). In the end you have a verification digit which you include in the generated pin code.
So now you can validate your generated pin codes. For a given pin code, you generate the verification digit and check it against the one included in the pin. If it's OK then you can extract the original number by performing the reverse operations.
It doesn't sound so good because it looks like security through obscurity but it's the only way you can use this. It's not impossible for someone to guess a pin code but being a 12-digit code with a verification digit, it will be very hard since you have to try 1,000,000,000,000 combinations and you just have 100,000 valid pin codes, so for every valid pin code there are 10,000,000 invalid ones.
I should mention that this is useful for disposable pin codes; a person uses one of these codes only once, for example to charge a prepaid phone. It's not a good idea to use these pins as authentication tokens, especially if it's the only way to authenticate someone (you should never EVER authenticate someone only through a single piece of data; the very minimum is username+password)
It seems you want to use the pin code as the sole means of identification for users.
A workable solution would be to use the first five digits to identify the user,
and append four digits as a PIN code.
If you don't want to store PINs they can be computed by applying a cryptographically secure hash (SHA1 or better)
to the user number plus a system-wide secret code.
Should i generate this code via some
sort of algorithm?
No. It will be predictable.
Or should i randomly generate it?
Yes. Use a cryptographic random generator, or let the user pick their own PIN.
In theory 4 digits will be plenty as ATM card issuers manage to support a very large community with just that (and obviously, they can't be and do not need to be unique). However in that case you should limit the number of attempts at entering the PIN and lock them out after that many attempts as the banks do. And you should also get the user to supply a user ID (in the ATM case, that's effectively on the card).
If you don't want to limit them in that way, it may be best to ditch the PIN idea and use a standard password (which is essentially what your PIN is, just with a very short length and limited character set). If you absolutely must restrict it to numerics (because you have a PIN pad or something) then consider making 4 a (configurable) minimum length rather than the fixed length.
You shouldn't store the PIN in clear anywhere (e.g. salt and hash it like a password), however given the short length and limited char set it is always going to be vulnerable to a brute force search, given an easy way to verify it.
There are various other schemes that can be used as well, if you can tell us more about your requirements (is this a web app? embedded system? etc).
There's a difference between guessing the PIN of a target user, and that of any valid user. From your use case, it seems that the PIN is used to gain access to certain resource, and it is that resource that attackers may be after, not particular identities of users. If that's indeed the case, you will need to make valid PIN numbers sufficiently sparse among all possible numbers of the same number digits.
As mentioned in some answers, you need to make your PIN sufficiently random, regardless if you want to generate it from an algorithm. The randomness is usually measured by the entropy of the PIN.
Now, let's say your PIN is of entropy N, and there are 2^M users in your system (M < N), the probability that a random guess will yield a valid PIN is 2^{M-N}. (Sorry for the latex notations, I hope it's intuitive enough). Then from there you can determine if that probability is low enough given N and M, or compute the required N from the desired probability and M.
There are various ways to generate the PINs so that you won't have to remember every PIN you generated. But you will need a very long PIN to make it secure. This is probably not what you want.
I've done this before with PHP and a MySQL database. I had a permutations function that would first ensure that the number of required codes - $n, at length $l, with the number of characters, $c - was able to be created before starting the generation process.
Then, I'd store each new code to the database and let it tell me via UNIQUE KEY errors, that there was a collision (duplicate). Then keep going until I had made $n number of successfully created codes. You could of course do this in memory, but I wanted to keep the codes for use in a MS Word mail merge. So... then I exported them as a CSV file.

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