Three issues:

• It is word-buffered. It will only output when whitespace is received.
• It won't always work if the password has a space in it.
• I imagine that reading a byte at a time (when more than a byte is available) is much slower than reading a chunk of bytes.

See Re^3: Filtering passwords from the output of a script.

By the way, binmode might be required. I remember having problems when attempting to read characters (as opposed to bytes) using sysread, but the details escape me.

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