passwd is a command on Unix, Plan 9, Inferno, and most Unix-like operating systems used to change a user's password. The password entered by the user is run through a key derivation function to create a hashed version of the new password, which is saved. Only the hashed version is stored; the entered password is not saved for security reasons.
When the user logs on, the password entered by the user during the log on process is run through the same key derivation function and the resulting hashed version is compared with the saved version. If the hashes are identical, the entered password is considered to be correct, and the user is authenticated. In theory, it is possible for two different passwords to produce the same hash. However, cryptographic hash functions are designed in such a way that finding any password that produces the same hash is very difficult and practically infeasible, so if the produced hash matches the stored one, the user can be authenticated.
The passwd command may be used to change passwords for local accounts, and on most systems, can also be used to change passwords managed in a distributed authentication mechanism such as NIS, Kerberos, or LDAP.
The /etc/passwd file is a text-based database of information about users that may log into the system or other operating system user identities that own running processes.
In many operating systems this file is just one of many possible back-ends for the more general passwd name service.
The file's name originates from one of its initial functions as it contained the data used to verify passwords of user accounts. However, on modern Unix systems the security-sensitive password information is instead often stored in a different file using shadow passwords, or other database implementations.