A server can identify a representation with an ETag. The client sends If-None-Match on a later request; if the tag still matches, a 304 allows reuse of the stored response.
The demo removes the body on a matching tag and sends a new body with 200 after a change. An ETag identifies a representation version; it need not be a hash.
When to use
Use conditional requests to reduce transfer for resources checked often but changed occasionally.