Nothing of that. If you access our Server your PC download the SourceCode and encrypt/decrypt there the Wallet. But if you delete the Browser Cache your PC download the Code again and open the Wallet again. The Website is only the GUI/Userinterface for the Wallet. Your passphrase is like a door key. All Software runs local at your PC
Thanks. I understand.
Next question ... As I understand it, the passphrase is encrypted as a first step to generate the private keys. Where does the key used to encrypt the passphrase come from?
Now i don't und er stand you question. But i try to answer.
Generate:
1. Your Browser download the Scrypt
2. You generate a passphrase (OpenSSL+AES)
3. Bitcoind generate a encypted Wallet (AES) and generate 10 addresses (JavaScrypt/Bitcoind/Bitcoinj)
4.It encrypt all together (OpenSSL+AES)
Login:
1. You access KryptoWallet (online)
2.You enter the passphrase (offline)
3. It decrypt the passphase (offline) (OpenSSL with AES)
4.It decrypt the Wallet (OpenSSL with AES) (offline)
5. access to Wallet (offline)
This is a short Version of how KryptoWallet works