Should passwords be transmitted in clear text outside secure domains?

Transmitting passwords in clear text outside secure domains is a significant security risk. Unencrypted passwords can be intercepted by unauthorized parties, leading to data breaches and compromised accounts. Encrypting passwords before transmission ensures that even if the data is intercepted, it remains unreadable without the appropriate decryption keys. This encryption is crucial in protecting sensitive information and maintaining user trust in systems that handle personal data.

In secure domains, there are mechanisms in place to protect data transmissions, but outside these domains, the likelihood of exposure increases considerably. Thus, encrypting passwords is an essential practice in safeguarding potentially sensitive information as it traverses various network paths, particularly in environments that may not be entirely secure.