Editor's Note: This article expresses the author's personal opinion and covers experimental UX techniques which aren't considered to be best practice.
Masking passwords is an old practice that’s commonly implemented in sign-up and log-in forms. It’s used to prevent over-the-shoulder snoopers from catching the user’s password. While masking passwords is a good security practice, there’s a chance it could jeopardize the user experience of your sign-up form. When users sign up on a website, they expect a no-hassle, worry-free form to fill out. But masking the password could prevent that.
Log-in forms are used more often than sign-up forms. Users only need to sign up once to create an account, whereas they will need to log in multiple times to access their account. Because log-in forms are used so frequently, there’s a strong chance that users will end up typing their password in front of other people.