Encrypting a variable name
Although you can type a variable name (such as $var1$) into the String field in the Macro Editor (or into the value part of the value attribute in the Code Editor) and encrypt the name of the variable (using the same steps that you would use to encrypt a normal input key sequence) this normally is not a useful thing to do. The reason is that when you encrypt a variable name only the characters making up the variable name are encrypted. The contents of the variable itself are not encrypted.
During macro playback, the macro runtime decrypts the encrypted text to get the plain text (such as $var1$), sees that the plain text is a variable name, and then evaluates the variable in the usual way.