More Than a Gatekeeper
It is tempting to think of a Wi-Fi password as just a key, something that lets you in and locks others out. That is part of the story, but it is only half of it. A Wi-Fi password also acts as the basis for encryption, which is the real reason a protected network is safe. Without that encryption, your traffic would be floating through the air for anyone nearby to read.
Why Wi-Fi Needs Protection
Wi-Fi works by broadcasting radio waves in every direction. The signal does not respect walls neatly. It spills out into the hallway, the street, and a neighbor's living room. Anyone with the right equipment within range can pick those waves up. On an open network with no password, that is exactly what they would see: the messages, web pages, and files moving between devices and the router, in a form that can be read.
How the Password Becomes Encryption
Modern home Wi-Fi uses standards called WPA2 and WPA3. When you set a password on the router and enter the same password on your phone or laptop, both devices use it to agree on secret keys. Those keys are then used to scramble every packet of data sent over the air. To an outsider, the traffic just looks like meaningless noise. Without the password, they cannot generate the right keys and cannot turn that noise back into readable information.
Why a Strong Password Matters
Because the password is the foundation of the encryption, a weak one weakens everything. Short or common passwords can be guessed by computers that try millions of combinations very quickly. A long password made of unpredictable words or characters is far harder to crack and gives the underlying encryption something solid to build on. That is why most guidance for home networks is the same: pick a password that is long and not easy to guess, then keep it private.
Source
This article was written using information from Wikipedia.