Yes, the salt is stored right alongside the username and hashed password. The point of the salt isn’t to be unknown; It’s to make every single password unique before it gets hashed, which invalidates the hackers’ pre-generated rainbow tables. It forces them to re-generate their table for each user. Even identical passwords will create different hashes, because the salt is different for each user. Essentially requiring the hacker to brute force every single password, even after they have the database downloaded.

Basically, the hash algorithms are known. There are a few common ones, but they’re all reliable. A rainbow table is generated by running potential passwords through each hash, and saving the results. For a simplified example: maybe for a certain hashing algorithm, “password” generates the hash “12345”. I have a pre-generated table with millions of potential passwords that tells me as much. And I have repeated this for all of the most popular hashes. This gigantic database (literally hundreds of GB in size) of millions of potential passwords and resulting hashes for the most popular algorithms is my rainbow table. This took hours of cooking my CPU to generate.

So I hack an unsalted password database, and find a bunch of hashes that are listed as “12345”. I can now guess that they’re probably using that specific hash algorithm, and can immediately crack a bunch of passwords purely because I have already brute-forced them before I hacked anything.

But now let’s say it’s a salted hash instead. When I hack the database, my pre-generated rainbow tables are useless. Because now “password” is not being hashed as “12345”. It’s being hashed as something entirely different, because the salt is added before it gets hashed. Even if multiple users use “password”, it still doesn’t help me because each of their salts is unique. So even if two different users use “password”, they’ll each return different hashes. So I need to recreate my rainbow table for every single user. Even if two users both used “password” I’ll still need to check each one individually, with their unique salts.

This doesn’t completely invalidate the breach, but it drastically slows down my ability to access individual accounts. The goal is simply to slow me down long enough for the company to be able to send out “hey, change your password” notifications, and for the users to do so. Without a salt, once I have the database, I instantly know which hash the company is using. And I can immediately access a bunch of accounts using my pre-generated rainbow table. But with the salt, I’m still forced to crack each user individually.

To be clear, weak passwords will still crack faster. A good password guessing attack doesn’t just brute force. It starts with known lists of common/popular/weak passwords, because that known list of weak passwords will often get you into an account extremely quickly.