Without looking at the subject, I would assume that the author needs a hashing algorithm, but not for cryptographic purposes. In which case, a smaller hash is just fine as long as you know how to take care of collisions (the book "Intro to Algorithms" handles this by putting colliding data into a linked list which is walked through to find the specific entry you need).

But since the subject specifies encryption, I would say the author needs to research more about cryptography.

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Reinvent a rounder wheel.

Note: All code is untested, unless otherwise stated