This is an example of a simple hash. A hash is basically encryption but it cannot be decrypted. You can, however, use the hash formula to check a piece of text with the encrypted hash. So this can be used as a password checker without needing to type the password into the project. Just the encrypted hash. The password in this project is "test123" The encoding is simple: for all the letters, it adds the number of the letter in the alphabet times the place the letter is in in the string.
this is actually used in websites to verify a users identity. It does this so that when a user signs up, it creates a hash for the users password. The only way this hash can be cracked is by using something called a "brute-force" which is a computer program that keeps comparing different passwords with the hash until it gets it right.