I'm thinking of creating a WordPress blog, not on WordPress.com but just using WordPress on a hosted website. I would like to allow comments on the blog, but was wondering in what way are commentators authenticated. (I don't have experience with WordPress.) Are passwords stored in plaintext? Are their hashes stored? Is bcrypt used? Are their credentials stored in the site's database or are they offloaded to WordPress.com? The point is - I don't want to create a security issue for users.
By default passwords are encrypted using 8 passes of MD5. There are other ways to configure the password encryption. (https://codex.wordpress.org/Function_Reference/wp_hash_password)
The hashes are based on custom keys setup in the wp-config file when creating the site.
They are stored locally and not on Wordpress.com
You can make users register to leave comments or you can open them up to the public.