Context: A website is hosted on multiple dedicated servers. There are frontend webservers, backend DB servers and other servers between them. The DB holds user's accounts passwords. All connections are secure and the registration/login pages can not be bruteforced (out of the question's range).
Threat model: A hacker manages to get a copy of the DB and wants to crack the passwords. The hacker has very powerful hardware power at his disposal (CPU/GPU/RAM/ASIC) and only needs to crack one single password to be considered as the winner (protecting a maximum of users is not enough, all users must be protected).
Question: Which of the cases below would be considered the most secure against the hacker efforts?
- Traditional iterations based hashing with salt (scrypt/bcrypt)
- Handmade multi-peppered hashing with very long secrets held at each "stage" (webserver/middle/DB).
- Webserver operation: Hash1 = SHA512 (password + secret1)
- Middle operation: Hash2 = SHA512 (hash1 + secret2)
- DB operation: Hash3 = SHA512 (hash2 + secret3)
- DB storage: Hash3 with salt
My opinion is that case 2 is by far the more resistant because iterations will not protect poor (low entropy) passwords such as "123456" for more than a few hours/days at best. As long as the secrets are very long and at least one of them remain unknown then I think the increased entropy will secure everyone for decades.
I do not see such scheme rolled out on production very often though, in general the consensus is "iterations+salt or get shamed", so maybe I am missing something.
Of course the implementation would need to be secure (handmade vs more standart scrypt) and the secrets must remain unknown. Moreover if a secret is revealed and must be changed, the update process would be a pain. On the other hand, login process would be more hardware friendly (no iterations).
Edit (based on Matthews comment): My question is not about the benefit of a pepper in an iterations based method. It is the security difference between iterations based vs secrets based methods.
Edit 2: I made more searches and managed to find a similar question after all, my bad (maybe the results improved based on my activity on current question though). It has a nice answer (by Thomas Pornin) similar to here.