The encryption method is why it needs to be 5.3.7+
It is mentioned in that article that it will help you get down to 5.3.2. I don't know what other part is keeping it above 5.3.1.
Laravel 4.2 requires PHP 5.4, btw. PHP 5.3 is EOL and with cheap hosting like DigitalOcean and the likes there's no reason to stay on 5.3. Get yourself a server with PHP 5.5 is my recommendation.
As for your question, Laravel uses the bcrypt algorithm when hashing passwords, which requires PHP 5.3.7.
It seemed to install OK. I am using the webserver at work, and they are reluctant to go up to 5.4 though I'm not sure why, but I don't have the political positioning to make demands. I did demand stronger coffee, which, after several months of review and analysis it was finally determined that we could, indeed, add 1 extra ounce per 8 cups.
I believe that in the near future Laravel will require PHP 5.4 at a minimum due to the use of traits, even if you can wrangle Laravel into submission on 5.3.1 you're going to hit a wall soon. Do you have the political pull to get a new server provisioned for your Laravel projects? That'll give you the best of both worlds, they'll be able to maintain old projects without constraining new.
That would solve it. I'm going to try to take advantage of what I can now. Looks like the only recourse is to upgrade to php5.4.
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