You have every right to ask yourself this question. FactoryCapi uses a powerful password hashing algorithm called bcrypt, and stores only the result in its database. We don't know your password, and will never ask you for it.
If you don't trust our storage system, you don't have to make a FactoryCapi account. You can always play with your Steam or Android account. In this case, we'll ask Steam or Google directly if you're logged in correctly.