We can use this set of prefixes to filter the data. Given an input hash, check whether its prefix is in the table. If it's not in the table, the prefix is certainly not in the file. If the prefix is in the table, there is a 1/8 ~ 13% chance of a "false positive" where the query is not actually in the file, but the set thinks it is.
What a Bloom filter does is start using the rest of the hash, by storing the presence of the next 32-bits of the hash in the same set, and so on. By storing the next 32 bits as well, we can drop the false positive rate to 6%. By using the next chunk of 32 bits, it drops again to 4%, and finally when storing 5 32-bit chunks (very conveniently, we have at this point "used up" all 32-bit chunks of our original 160 bits) to around 2.5%. All the while, the bloom filter is fitting into the same 512MB we originally gave it.
But really, hashing is so cheap there's no point in trying to be clever like this for an on-disk implementation. My code is designed to take any strings as input, whether they are HIBP hex hashes already or something else. If this were intended to be a high performance in-memory implementation used for a database or something, the constraints would be different.
Pwned passwords 2.0 was half a billion passwords. That's 29 bits. To get a 0.05% false positive rate you need an additional 11 bits or so. That's 40 bits per hash, or 20 billion bits total, and then you need to binary search it (29 lookups) or make it into a tree and add bookkeeping structures.
The equivalent performance bloom filter only takes 5 billion bits of storage and 11 single bit checks in a bitmap.
I'm not a professional programmer, but I would have supposed a bloom filter is in this case equivalent to just saving the first n bits of every sha1 hash. Is that wrong?