The password is set by you, not by unknown servers, also this password will not be saved in the cellphone , so you must remember it every time you use this app. This is the most secure way, when privacy its in your hands.
You can have a different password for each contact of yours or different passwords for each day. Its up to you. The receiver only needs the password you assign to him.
The information can be sent encrypted or not encrypted, its up to you. When encryption is on, the app encrypts everything using AES 256 and SHA3 also known as Keccak.
The speed of the encryption systems can be different depending on the hardware, the app will take a few seconds to encrypt the message, why?, because of the powerfull encryption systems used to protect the infomation.
The app needs some permitions to be operative, feel free to check the source code if doubts araise.
Famous messangers use encryption, but they save your password in their servers, so, if they are hacked or some government ask for your information or they just decide to sell your private data, you will not know.