[xanthar]

This is a better version. But maybe a better hash algorithm like sha-256 could be used instead for further security measures..
Maybe even check out scrypt - a new key deriviation function(2009). http://www.tarsnap.com/scrypt/scrypt-slides.pdf

[K.ing]

I like the implementation, will look into stronger encryption.

[nikentic]

Why would anyone ever need this? I am not sure why anyone would need a local login system in Python.

[nikentic]

For learning purposes like the same thing if somebody makes a calculator..

But it's not a secure login system. Neither does it accomplish anything. I am not saying it's useless, but this code isn't gonna teach anyone anything.

[nikentic]

Please do tell me how to decrypt a SHA 256 hash. Just to prove your point that it is not secure.

I did not mean that the encryption itself isn't save. Just that the implementation of it isn't safe. It's stored locally in your RAM and there is no salt at all. These 2 are obvious security flaws and should be corrected.