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Don't you think that you should work harder for that
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Not really - as you are no doubt aware, some systems use encryption systems other than md5 or md5 with a salt. In this case with Lotus, the password is encrypted for comparison to the stored password on the server and thus the only way to log in against it is to send a plain text password from the client.
Any system worth its pennies will not allow an encrypted password to be seen based upon the submission of a correct username. LN is the same - you can't just send the username and get back the encrypted password to then be compared against the password encrypted at client level by vB.
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instead of breaking the privacy of your users by having their passwords?
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Me having their passwords and thus breaking their privacy is subjective as I have access to the database and of course all data. As far as the transmission of plain text passwords, SSL addresses that concern.