SFTPD, or Secure File Transfer Protocol Daemon, is a server application that facilitates secure file transfers over a network. It uses encryption to protect data during transmission, ensuring that sensitive information remains confidential. SFTPD is commonly used in environments where data security is a priority, such as in financial institutions or healthcare organizations. The protocol operates by allowing clients to connect and transfer files securely using various authentication methods. It is often integrated with other systems and can support multiple file transfer protocols, including SFTP and FTP. This versatility makes SFTPD a valuable tool for managing file transfers in a secure manner.