You are right: the goal of this algorithm is to construct an alternative encryption/decryption scheme using a cryptographically secure hash, and exclusive or.

You are right: the goal of this algorithm is to construct an alternative encryption/decryption scheme using a cryptographically secure hash, and exclusive or. So I'm trying to look for possible weaknesses in the scheme, e.g.: would it be safe to store (random-padded) plain text this way (vs. should it be compressed)? Since the encrypted messages are xor'ed with a (binary) hash, would they be exposed to attacks such as byte-by-byte crypto-analysis? And, how does simple xor compare against the classical power/modulus math in this respect - considering the random-like context and short length of a single, cryptographically secure hash? Finally, should the algorithm be proven too weak, we might choose to substitute he = xor(hb,m) with e.g.: e = AES_encrypt(hb, m).