Call to undefined function password_hash()

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I am running php version 5.4.16 on localhost right now, while I am developing my site. I want to use password_hash(), but I keep getting this error:

Fatal error: Call to undefined function password_hash() in /dir/to/file.php on line 123

Why is this happening?

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The new password_* methods are only available as of PHP 5.5:

http://www.php.net/manual/en/function.password-hash.php

Take a look at this library that provides forward compatibility:

https://github.com/ircmaxell/password_compat

You can use that to get access to the new password_* methods until you are able to run PHP 5.5.