Indexing a SHA hash in place of a VARCHAR
This question has the [Performance] tag so I suspect that you may be thinking of a hash index. In SQL Server, the maximum key length for nonclustered indexes is 1700 bytes. It is not possible to create a nonclustered index with a long string column as a key column. For example, for the following table:

DROP TABLE IF EXISTS #HASH_INDEX_DEMO;

CREATE TABLE #HASH_INDEX_DEMO (
    ID BIGINT NOT NULL,
    BIG_COLUMN_FOR_U VARCHAR(8000) NOT NULL,
    SMALL_COLUMN VARCHAR(10) NOT NULL
);

INSERT INTO #HASH_INDEX_DEMO WITH (TABLOCK)
SELECT RN, REPLICATE(CHAR(65 + RN % 26), (RN % 43) * (RN % 119)), 'SMALL'
FROM 
(
    SELECT ROW_NUMBER() OVER (ORDER BY (SELECT NULL)) RN
    FROM master..spt_values t1
    CROSS JOIN master..spt_values t2
) q;


Attempting to create this index:

CREATE INDEX I ON #HASH_INDEX_DEMO (BIG_COLUMN_FOR_U);


Fails with this error:


  Msg 1946, Level 16, State 3, Line 19 Operation failed. The index entry
  of length 1701 bytes for the index 'I' exceeds the maximum length of
  1700 bytes for nonclustered indexes.


If you need to do an equality search on that column then the query optimizer must do a table scan. For example, the following query takes about 0.6 seconds on my machine:

SELECT ID, SMALL_COLUMN
FROM #HASH_INDEX_DEMO
WHERE BIG_COLUMN_FOR_U = 'A'
OPTION (MAXDOP 1);




One alternative is to create a hash index on the column and to perform the equality search on both the hash index and the column itself. CHECKSUM() is probably the best choice because you don't need any cryptographic security for this and a small number of collisions is acceptable. You primary want something small and fast. The code below adds a computed column and creates an index on that column:

ALTER TABLE #HASH_INDEX_DEMO ADD BIG_COLUMN_FOR_U_CHECKSUM AS CHECKSUM(BIG_COLUMN_FOR_U);

CREATE INDEX I ON #HASH_INDEX_DEMO (BIG_COLUMN_FOR_U_CHECKSUM);


The query below returns the same results as the initial query but SQL Server is able to use the index. It finishes in 0.01 seconds on my machine.

SELECT ID, SMALL_COLUMN
FROM #HASH_INDEX_DEMO
WHERE BIG_COLUMN_FOR_U_CHECKSUM = CHECKSUM('A') AND BIG_COLUMN_FOR_U = 'A'
OPTION (MAXDOP 1);




Hash indexes are a good choice when the key length is too long to allow for a nonclustered index or disk space is at an absolute premium. In your question you estimate that the length of the column will be about 10 to 30 characters to the added complexity probably isn't worth it for your scenario.