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So I am adding support for plain text passwords encryption (please note this is encryption for passwords we need to keep - obscurity not security).
There is a new utility called katello-passwd (see man page or help option) to encrypt a password.
It starts with$1$ (1 is for version 1) and it can only be used for database-password setting (we do not have any plaintext passwords in Katello yet)
Katello can also read unencrypted passwords from this field (if it does not start with$1$ )
I will raise a RFE against Candlepin to do the same for database password. Pulp is fine (no passwords there).
I modified katello-configure to use the function to encrypt database password during installation
More on the demo.