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I have followed with interest this discussion of passphrase
"entropy".  What I'm not clear on is the effect of a hashing 
algorithm on the final entropy.  If I come up with a "random" set 
of printable characters which contain 128 bits of entropy, and 
feed them to MD5, let's say, will I still have 128 bits of 
entropy on the output?  Or do I need some sort of safety margin 
above 128 bits to "be sure"?

What's lurking in the back of my mind is this -- if you enter 
something with LESS than 128 bits, the hashing algorithm has to 
"pad" or otherwise fill in the missing bits from <somewhere>.  
Now if I have entered a phrase with EXACTLY 128 bits of entropy, 
hypothetically, is that enough to have flushed the padding or 
whatever out of the pipeline?

Can we really treat MD5 as a "magic black box", or does the 
optimal input require a knowledge of how the box works?

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