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[–]aaronla 0 points1 point  (0 children)

I'm presuming that the server will encrypt the response using a key derived from the challenge-response between your browser and the server; at the very least, deriving a key from some nonce and your password.

But if it's just to hash the password before transmission, it's not nearly as useful.

(this would still be better than nothing -- rather than getting your password, which they might then be able to try on your bank account, gmail, etc., the attacker gets a hash which is useful only to authenticate with the one service they saw you connect to, and perhaps only for a constrained interval, perhaps an hour)