What kind of password system do you mean? Like a warp code?
If they said that you need to know binary, I don't know the validity of that  (Although I can envision a sort of system which would make use of binary concepts)
Maybe explain a little further on what you mean by a password system. Do you mean something so that only the person who knows the code can get in to a part of a level?
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With our extreme gelatinous apology,
We beg to inform your Imperial Majesty,
Unto whom be dominion and power and glory,
There still remains that strange precipitate
Which has the quality to resist
Our oldest and most trusted catalyst.
It is a substance we cannot cremate
By temperatures known to our Laboratory.
~ E.J. Pratt
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