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Password storage: why hashing and encryption serve different jobs
A login service usually needs to verify a password, not recover its original text.
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Verification without plaintext
Password hashing transforms a supplied password into a value used for later comparison. A suitable password-hashing scheme deliberately makes repeated guesses expensive. Unique salts prevent identical passwords from automatically producing identical stored values and reduce the usefulness of precomputed tables.
General-purpose fast hashes are not a substitute for a password-hashing design. Work and memory parameters matter, as does their adjustment to the service's threat model and capacity. A scheme name without deployed parameters is incomplete evidence.
A database leak changes the attack
When hashes leak, attackers may test guesses offline without the service's ordinary login rate limits. Long, unique passwords reduce the usefulness of reuse and common guessing patterns. Server-side rate limiting remains valuable for online attacks, but it cannot govern a copied database.
Password storage also differs from an encrypted vault that must later decrypt user data. A review needs to examine key derivation, recovery and data encryption separately. Never infer that a product safely stores secrets from the word encrypted alone. Continue with custody and recovery dependencies.