The password is used to secure your sproof account. We do not store passwords in plaintext, but we can send you a link to reset your password. In order to commit transactions to the blockchain you need a private key. This key is stored encrypted and protected by your passphrase. sproof is never in possession of your passphrase and has no access to your private key. If you forget your passphrase we can not reset it for you and you can only create a new passphrase by knowing the old one. The sproof-code is a synonym for mnemonic and is used to generate your private key.