How to change default password hashing algorithm (passalgo) without reinstalling system

Solution Verified - Updated -

Issue

  • How can we switch a system from using MD5 as the hashing algorithm to using SHA512? Assuming we can do that easily, how about the existing users' passwords or passphrases in /etc/passwd or /etc/shadow?

Environment

  • Red Hat Enterprise Linux 5
  • Red Hat Enterprise Linux 6
  • Red Hat Enterprise Linux 7

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