Redis cache - worth it?

I've got Redis installed and running on my server now. I see in the Xenforo manual, it gives this:

Code:
$config['cache']['enabled'] = true;
$config['cache']['provider'] = 'Redis';
$config['cache']['config'] = [
    'host' => '127.0.0.1',
    'password' => 'password'
];

The host line is 127.0.0.1. Am I supposed to replace that with the IP address of my site or server?

Do I replace "password"? What is it a password of?
 
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