What do you mean with *Password Encryption*?
Do you mean to encrypt all traffic going through the
Gnutella Network? That would be bad:
If you want to encrypt it all clients will have to know the algorithm
to decrypt it. Since Gnutella is free everyone knows how to decrypt and crack the encryption, so it gets useless if the algorithm is public.
Now what happens if it aint public?
Then it will be closed source and thus not free.
Like FastTrack