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I know md5 is hash algorithm !
So i've seen it on major websites like http://www.jquery.com while selecting a download.
what is that thing anyway? Just curious !
It is a thing called checksum, in order to know if your file has been altered after download. Sometimes, files are corrupted or altered, whether intentionally or not, even if the file has the same name and size in bytes. So, to know if it has been altered, you can do MD5 checksum on it and see if matches the one posted on the web.
Besides from MD5, there are a lot of other algorithms like SHA1, SHA256 (more secure), because it can happen that after modifying a file it still has the same checksum.
There are a lot of programs that can calculate the MD5SUM for you.