Hashing vs Encryption: A Complete Guide to Choosing the Right Data Security Method

Reading Time: 9 minutes

Hashing vs Encryption? Choosing between them for your data security needs can be difficult, primarily since they both serve the critical but distinct role in protecting your business information. However, making the wrong choice can leave your sensitive data vulnerable to specific security risks. In this blog, we will break down the key differences between hashing and encryption and help you understand when to use each. 

So, without further ado, let’s get started!!

Hashing vs Encryption: What Is Encryption?

It is the process of converting a readable message into an unreadable or garbage message,  known as the ciphertext. The ciphertext obtained from encryption can be easily converted back into plaintext using a specific encryption key.

How Does Encryption Work?

Encryption uses specific instructions or rules, known as algorithms, to convert original data into a ciphertext. An encryption algorithm uses an encryption key, which is a unique piece of information, and this key determines how the plain text is converted into ciphertext and vice versa. The different encryption keys serve various purposes.

Types of encryption keys

The encryption keys can be either symmetric or asymmetric, so let’s explain them further.

• Symmetric Keys: Symmetric cryptography uses symmetric keys, which means the same key for both encryption and decryption. In simple terms, the sender and recipient need to have the same key that can be securely shared.
• Asymmetric Keys: Asymmetric cryptography uses asymmetric keys, which are either public or private. The public key is used for encrypting the information, whereas the private key is used to decrypt it. Only the private key is kept secret in asymmetric encryption.

Other than symmetric or asymmetric keys, the third option is hybrid encryption, which combines both keys. The purpose is to use the strengths of both and minimize their weaknesses. Furthermore, in the context of hashing vs encryption, encryption is preferred in certain scenarios due to the flexibility it provides.

The encryption method offers several advantages. However, understanding the difference between hashing and encryption is just the beginning; implementing these security measures correctly for your specific business needs requires careful planning and expertise. Contact us to protect your systems.

Hashing vs Encryption: Common Encryption Algorithms

Modern encryption relies on proven algorithms that have withstood real-world testing. Let us tell you about them below:

AES

AES, or Advanced Encryption Standard (AES), is a trusted algorithm by the US government. It is highly efficient in 128-bit form, and it also uses keys of 192 and 256 bits for heavy encryption. However, AES is extremely secure; brute force attacks are theoretically possible but computationally infeasible with current technology.

Triple DES

The Triple DES was developed to succeed the original Data Encryption Standard (DES) algorithm, which became penetrable over time. It uses three individual keys, each 56 bits long, for a total key length of 168 bits. However, some experts consider 112 bits more accurate. AES is essentially replacing DES.

RSA Security

It is a public key encryption algorithm and the standard for encrypting data; in contrast to DES, RSA is considered an asymmetric algorithm. Mainly, this is because it utilizes a pair of keys: a public key for encryption and a private key for decryption. Furthermore, the RSA encryption is strong, making it difficult for attackers to crack or break.

Blowfish

It is known for its overall efficiency and effectiveness, and this symmetric cipher splits messages into blocks of 64 bits and encrypts them individually. Additionally, it’s one of the most flexible encryption methods available.

Twofish

It is the successor of Blowfish, and the keys used in this algorithm may be up to 256 bits in length. As a symmetric technique, the user only needs one key. Furthermore, the Twofish is ideal for both hardware and software environments.

Elliptic Curve Cryptography (ECC)

It is an advanced form of asymmetric encryption based on elliptic curves over finite fields. ECC supports strong security and massive encryption keys, all while maintaining an efficient and smaller footprint.

Let us help you understand hashed vs encrypted more clearly with the help of your examples.

Example of Encryption

If you are actively looking for a hashing vs encryption example, then let us give you an example of encryption. Afterward, we will move towards hashing examples.

• Encryption is used to protect online traffic from intervention, which is an essential feature of VPN services.
• In instant messaging apps, end-to-end encryption (E2EE) is used to protect the privacy of user chats.
• Files can also be encrypted so that they cannot be accessed or intercepted during transit.

Now let’s move towards hashing so that you can understand both and choose the best in encrypt vs hash.

Hashing vs Encryption: What Is Hashing?

Hashing is the process of converting the data into a fixed-size string called a hash using a hash function. It is impossible to retrieve the original information from the hash key. Furthermore, generally, the hash keys are stored in databases and used to verify whether the input data matches the original by comparing hashes. 

How Does Hashing Work?

A secure hash algorithm creates hash values or hash functions. The hash algorithm gives different hash values for other keys. So that one unique input string has a unique hash value. 

Moreover, the quality of hashing is determined by how collision-resistant (a case where hash values are ) its hash functions are. Collision is a hash-function vulnerability that bad actors can exploit. The key to good hashing is its complexity to avoid collisions. Furthermore, hashing is useful in password storage, etc.

All these advantages of hashing are due to the special way in which hashing algorithms are designed. They make hashing efficient and secure for storing and checking data.

Hashing vs Encryption: Hashing Algorithms

Above, you have read about encryption algorithms, so let us explain algorithms in hashing: 

MD5

It is efficient but outdated because of weaknesses against collision attacks (different inputs generating the same hash).

SHA-1

SHA can produce 160-bit hashes; however, it can also create security vulnerabilities.

SHA-256

It is a more secure and widely used algorithm, highly useful in blockchain, data storage, and SSL certificates.

SHA-3

Based on the Keccak algorithm, it delivers more security, becoming a popular choice for IoT and post-quantum encryption systems.

Bcrypt

It has baked-in salting and adapts to computational advances, making it a top choice for password storage.

Argon

Argon provides advanced customization and resistance to cracking attempts.

Now you know the difference between a hashing algorithm and an encryption algorithm, so it’s time for us to explain the examples of hashing. So you can understand the concept of hashing better and choose the best between hashing vs encryption.

Examples of Hashing 

The below examples of hashing can help you understand the practical implementation of this technique: 

• During file sharing, downloading, or mirroring processes, hashing preserves the file integrity and ensures that the files users get are intact.
• The digital signatures always need the calculation of a cryptographic hash, which guarantees security and efficiency.
• In verification of passwords, cryptographic hashes are used during the authentication process, where a system compares the password hashes with its own stored value.
• It is used in cryptocurrency systems to safeguard them from DDoS attacks.

With all this information in your mind, we are pretty sure that you have understood the difference between hashing and encryption. But let’s give you a head-to-head comparison between the two.

Hashing vs Encryption: Head-to-Head Comparison

Hashing and encryption both serve distinct purposes in the cybersecurity field, and the following outlines the key differences between them. Helping you understand the utility of both in different scenarios.

Parameters	Encryption	Hashing
Reversibility	Reversible with correct key	Not reversible
Key Type	Public and private	Private
Data anonymized	No	No
Utilized for passwords	Yes, while in transmission	Yes, while in storage
File Creation	Encryption generates new keys for each information.	A hash function generates a unique hash for each input. But in rare cases, it may create the same hash value for different inputs (a hash collision, also explained above).
Algorithms	AES, DES, and Blowfish, etc	MD5, SHA256, and Argon etc
Real-world Examples	Whatsapp Uses end-to-end encryption (via Signal Protocol) to secure messages and calls so that only sender and recipient can access them.	Microsoft uses RSA MD4 to hash user passwords into a 16-byte OWF (One-Way Function) format for NTLM authentication. Although MD4 is outdated by modern security standards, but still used in legacy Windows systems.

Assuredly, in hashing vs encryption, they have distinct applications depending on their key type and algorithms. So let’s discuss when it’s appropriate to use hashing and encryption. 

When to Use Hashing vs Encryption

You can use encryption to secure data that can be retrieved later and hashing to verify and store information like passwords without reversing them. We will first discuss scenarios in which hashing can be applied.

When Is Hashing Used?

If you are looking to completely understand the difference between hashing vs encryption. Then, below are the scenarios in which hashing can be pretty useful

• In non-cryptographic contexts, hashing is used for fast lookups in data structures, but cryptographic hashing focuses on data integrity and security
• With hash comparisons, the integrity and authenticity of messages or documents can be ensured. 
• You can use it for file integrity checks by comparing stored hash values before and after transmission, and file tampering can be detected.

Now is the time to discuss scenarios where encryption is most effective.

When Is Encryption Used? 

Encryption is mostly used when you are handling sensitive or confidential information, and some of the other scenarios where it can be used are given below:

• Data is being transferred via email, HTTP, APIs, or messaging apps, especially over Wi-Fi.
• You are handling sensitive or confidential data (health records, intellectual property, or personal identifiers (PII).
• You are storing data on local drivers, servers, or cloud storage, and you don’t want others to access it.
• Your system has user passwords or credentials (in this case, encryption or hashing both can be helpful).
• You have certain data types and need to ensure compliance with legal or regulatory requirements (HIPAA, GDPR, etc.).
• You want to limit your staff’s raw access to all data to prevent insider threats.
• You are using cloud services or third-party platforms so that vendors don’t have access to your raw data.
• Suppose you have a modern app dealing with messaging, login, file storage, or APIs. Then it should include encryption by design.

Encryption is beneficial when you have to prove data integrity or authenticity. You can use cryptographic encryption with signatures to verify the content that has not been altered (for instance, software updates and contracts, etc.). That’s why the encryption software market is expected to reach $30.44 billion in 2029.

Suppose you work in a specific industry, such as healthcare, education, retail, insurance, or finance, and have read general examples. In that case, you may wonder how encryption or hashing can be applied in your industry. Or, which one would be best for you?

 Let us help you understand how each can be used based on industry-specific needs.

Hashing vs Encryption: Industry-Specific Uses of Hashing

Hashing is not a one-size-fits-all solution, as it plays a unique role across different industries. Whether it is about securing patient data or verifying data integrity in finance, the goal remains the same: ensuring data security. 

• Hashing in Healthcare: In the healthcare industry, hashing ensures that patient records are not tampered with by creating a unique fingerprint for each file. Here, any alteration changing the hash value can indicate possible data breaches.
• Hashing in Retail: Hashing is particularly useful in safeguarding credit data during payment processing by only storing hashed versions of sensitive information. 
• Hashing in Insurance: Hashing has proved to be vital for insurance industry as it creates a tamper-proof log of submitted claims and policy documents. It can help ensure transparency during audits or disputes.
• Hashing in Real Estate: Hashing can be useful for digital documentation authentication as it validates the authenticity of ownership deeds, contracts, and lease agreements stored on digital platforms or blockchain.
• Hashing in Education: Universities can use hashing to issue tamper-proof digital certificates and diplomas that help employers verify their authenticity quickly.

If your industry differs from those mentioned above, and you are confused about whether hashing or encryption is best for you. Then book your free consultation with our experts, who have 19+ years of experience.

Hashing vs Encryption: Industry-Specific Uses of Encryption

Encryption is all about safeguarding sensitive data across industries, with each sector using it in distinct ways. This cybersecurity method ensures that data remains compliant and confidential across industries.

• Use of Encryption in Healthcare: HIPAA does not explicitly mandate encryption in healthcare. Still, it is a safeguard for protecting ePHI (Electronic Protected Health Information), especially during transmission and while stored on servers or devices.
• Use of Encryption Retail: During online and in-store transactions, encryption can help protect the cardholder data, primarily through E2EE (end-to-end encryption) at the point of sale.
• Use of Encryption Insurance: Sensitive data used in underwriting (financial details, medical histories) is encrypted to ensure confidentiality during data sharing between third parties and insurers.
• Use of Encryption in Real Estate: It is useful in protecting the mortgage applications, proof of funds, and identity documents shared digitally between agents, buyers, and banks.
• Use of Encryption Education: Educational institutions can use encryption to secure grades, financial aid data, and internal email from unauthorized access.

Wrapping Up

Both hashing and encryption serve critical roles in cybersecurity. Encryption is used for data confidentiality, while hashing is used for integrity verification. However, choosing between them can be difficult, considering the specific business needs. Whether you are in healthcare, finance, retail, or any other industry, implementing the wrong method can expose your organization to serious security risks. 

If you are facing confusion in hashing vs encryption, or need help in developing a detailed data protection strategy. The experts at Purelogics can assist you, so book your 30-minute free consultation with us to secure your data with confidence.

FAQs

What’s the difference between encryption and hashing?

Hashing is a one-way process that converts data into a fixed-length string, whereas encryption is a reversible process. It can be used to protect data confidentiality and decrypt hashing, but it cannot do both.

When should you use encryption vs hashing?

Encryption is most effective when you need to retrieve the original data, and hashing is useful for storing sensitive data, such as passwords, or verifying data integrity.

Is hashing more secure than encryption?

Hashing and encryption have distinct purposes; for instance, hashing is secure for storing data that is not required to be reversed. Moreover, encryption safeguards the data that must remain retrievable or confidential. So, no hashing is more secure than encryption or vice versa; both serve different purposes.

Which is best, hashing vs. encryption?

It depends on your business needs; encryption is best for data privacy, whereas hashing is ideal for data verification and secure storage.

Why is encryption important for the healthcare industry?

Encryption helps in the protection of sensitive patient data from breaches and ensures data compliance with HIPAA. It secures the electronic health record, billing information, and communication.

What does data encryption mean in healthcare?

In healthcare, data encryption involves converting patient information into a coded format that authorized users can access. This helps ensure confidentiality and prevents unauthorized exposure.