Key derivation is another important application of hash functions in cryptography. Hash functions are used to derive encryption keys from passwords or other secrets, ensuring that the encryption key is not stored in plaintext. This provides an additional layer of security, as an attacker would need to know the original password or secret to derive the encryption key.

Key derivation functions (KDFs) like PBKDF2 (Password-Based Key Derivation Function 2) and Argon2 use hash functions like SHA-256 to derive encryption keys from passwords or secrets. These KDFs apply the hash function multiple times, with iterations and salt, to slow down the process and make it more computationally expensive for attackers.

Key derivation provides:

- Secure key storage: Encryption keys are not stored in plaintext.

- Password protection: Passwords are not stored in plaintext, making them harder to compromise.

- Key management: Derived keys can be used for various cryptographic purposes.

By using hash functions for key derivation, we can ensure that encryption keys are securely generated and stored, providing an additional layer of protection for our sensitive data.