Howto: Hide password in project

Published 2017-05-31

I've seen this question asked in the forums many times, e.g:
https://scratch.mit.edu/discuss/topic/263069/
https://scratch.mit.edu/discuss/topic/262898/
https://scratch.mit.edu/discuss/topic/229336/
https://scratch.mit.edu/discuss/topic/206014/
https://scratch.mit.edu/discuss/topic/119372/
https://scratch.mit.edu/discuss/topic/71034/
https://scratch.mit.edu/discuss/topic/44052/

So I decided it was time to write a little demo project to show how you can use something known as a "hash function" to effectively 'hide' a password or code (e.g. for a level) in a project (or in a cloud variable) in such a way that it's still practically impossible to find the password/code even though you can still see its hashed value inside the project or cloudvar.