Let us imagine a situation where a company stores its user passwords (let's ignore salts, etc for now) using some hash (say sha256) and the company gets breached. All of the username and password details are now public. The passwords are hashed, thanks to the hashing algorithm.
Now someone with ill intent gets their hands on that credential database. Looking at the hashes, they identify the hash. Now what they do is check the minimum required password length (from the user registration page) and create a new word list of all the possible passwords in that range in their hashed format. That is, they now have an equivalent wordlist but in an already hashed format.
- Is it totally pointless to create such a hashed wordlist?
- Would it help saving time in cracking passwords in the long run?