MD5 produces a 128-bit hash; SHA-256 produces a 256-bit hash. But the real difference: MD5 is cryptographically broken (collision attacks since 2004); SHA-256 is not. Practical implications: (1) MD5 is fine for accidental corruption detection or de-duplication keys; (2) MD5 is NEVER acceptable for security-sensitive uses (signatures, HMAC, integrity of untrusted files); (3) SHA-256 is the industry-standard general-purpose cryptographic hash (Bitcoin, TLS certs, Git). For password hashing, neither MD5 nor SHA-256 is appropriate — use bcrypt or Argon2. Generate both hash types with the hash generator.
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