RFC 1459, IRC : Client and server authentication

7. Client and server authentication

   Clients and servers are both subject to the same level of
   authentication.  For both, an IP number to hostname lookup (and
   reverse check on this) is performed for all connections made to the
   server.  Both connections are then subject to a password check (if
   there is a password set for that connection).  These checks are
   possible on all connections although the password check is only
   commonly used with servers.

   An additional check that is becoming of more and more common is that
   of the username responsible for making the connection.  Finding the
   username of the other end of the connection typically involves
   connecting to an authentication server such as IDENT as described in
   RFC 1413.

   Given that without passwords it is not easy to reliably determine who
   is on the other end of a network connection, use of passwords is
   strongly recommended on inter-server connections in addition to any
   other measures such as using an ident server.