Update new SQL column with random strings

While I do not recommend doing this, primarily because MySQL makes certain aspects less fun, this can be done entirely in MySQL DML without even the use of user-defined procedures. Procedures would allow the use of procedural while loops, etc.

I've created an sqlfiddle. The first step is to create the random values; in this case they are also ensured to be distinct in the table afterwards, which ensures there is one less thing to worry about.

-- Create lots of random values without using a proceure and loop.
-- There may be duplicates created. Could be a temporary table.
-- Would be much simplified if there was already a numbers table.
create table idents (value char(5));
insert into idents (value) values (left(md5(rand()), 5));               -- 1
insert into idents (value) select (left(md5(rand()), 5)) from idents;   -- 2
insert into idents (value) select (left(md5(rand()), 5)) from idents;   -- 4
insert into idents (value) select (left(md5(rand()), 5)) from idents;
insert into idents (value) select (left(md5(rand()), 5)) from idents;
insert into idents (value) select (left(md5(rand()), 5)) from idents;
insert into idents (value) select (left(md5(rand()), 5)) from idents;   -- 64

-- Delete duplicate values. While there may be a rare duplicate we will
-- still be left with a good many random values. A similar process
-- could also be used to weed out existing used values.
delete from idents
where value in (
  -- The select * is for another MySQL quirk
  select value from (select * from idents) i
  group by value
  having count(value) > 1);

Then the random values have to be associated with each person. This is done with a horrid simulation of a "ROW_NUMBER" on derived relations and a join.

set @a = 0;
set @b = 0;

-- Now here is UGLY MYSQL MAGIC, where variables are used to simulate
-- ROW_NUMBER. YMMV, it "Works Here, Now". Note the very suspicious
-- hack to assign @b back to 0 "for each" joined item.
update people p2
  join (select p.id, i.value
    -- Give each person record a row number
    from (select @a := @a + 1 as rn1, id, @b := 0 as hack from people) p
    -- Give each random number a row number
    join (select @b := @b + 1 as rn2, value from idents) i
    -- And join on row number
    on p.rn1 = i.rn2) pv
  on p2.id = pv.id
set p2.identity = pv.value

Again, YMMV.