What does the directive 'encrypt passwords' do in Samba?

The directive 'encrypt passwords' in Samba specifically enables the Samba server to use encrypted passwords for user authentication. When this directive is set to 'yes', it forces Samba to require that all passwords be transmitted securely rather than in plaintext. This is important for enhancing security, as plaintext passwords can be easily intercepted by attackers, posing a significant risk when accessing shared resources over a network.

In environments where security is a priority, using encrypted passwords is crucial to ensure that even if the network traffic is captured, the passwords cannot be readily exploited. This directive aligns with standard security practices in mixed environments where Samba operates, allowing interoperability with systems that also support encrypted password authentication.

The other options do not accurately describe the functionality of the 'encrypt passwords' directive. For instance, using plaintext passwords is explicitly counter to this directive, and while encrypted password storage is a separate concern, the directive does not control storage directly; rather, it focuses on the authentication process itself. Lastly, there is no relation to token-based authentication, which is a different mechanism altogether and not relevant to this specific directive.