There are often situations where we have to give database access credentials in a shell script. This can be a security issue as database connection details are explicitly written in these scripts. Oracle provides an option of creating an external password storage mechanism.
Wallet is simply a directory in database server where passwords are written in an encrypted form. The wallet location is configured in SQLNET.ora file and a stored password can be retrieved/used by referencing a TNS alias configured in TNSNAMES.ORA file. Now instead of using explicit db connection details, one can use this TNS alias in shell scripts to connect to database.
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