If the connecting software accepts hashed passwords, it will not stop people who steal hashed passwords. All he does is hide what a real password is.
In addition, if the software you are connecting to does not accept hashed passwords (database, website, ...), you will have to store your password so that you can return it back to its original state. The hashed version will not help you there.
If you want to scramble the storage so that people cannot read the file, you can use Windows.EncryptFile() and Windows.DecryptFile() . In the new Delphi, which is neatly wrapped in IoUtils.TFile.Encrypt() and IoUtils.TFile.Decrypt .
If you really want others to not read your plaintext version, you will have to use some encryption with the key. Where do you store this key then? This can damage the whole purpose of storing a password in the first place. It is better to prevent other users from accessing, for example, using user privileges for the file system, because all that you or your software can do, a hacker can do if he has the same privileges.
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