ReadLineByte.cs

using System;
using System.Collections.Generic;
using System.IO;
using System.Security.Cryptography;
using System.Text;

namespace demo_read
{
    class Program
    {
        static void Main(string[] args)
        {
            string pathSource = @"arquivo.txt";


            SHA1 algorithm = new SHA1CryptoServiceProvider();

            foreach (byte[] buffer in ReadLineByte(pathSource))
            {
                algorithm.TransformBlock(buffer, 0, buffer.Length, buffer, 0);
            }
            algorithm.TransformFinalBlock(new byte[0], 0, 0);

            string hash = ConvertByteArrayToString(algorithm.Hash);

            Console.WriteLine(hash);
        }

        public static IEnumerable<byte[]> ReadLineByte(string pathSource)
        {
            using (FileStream fsSource = new FileStream(pathSource, FileMode.Open, FileAccess.Read))
            {
                const byte LineBreak = 10;
                int read;
                List<byte> linha = new List<byte>();
                byte[] buffer = new byte[1];
                while ((read = fsSource.Read(buffer, 0, buffer.Length)) > 0)
                {

                    linha.Add(buffer[0]);

                    if (buffer[0] == LineBreak)
                    {
                        yield return linha.ToArray();
                        linha.Clear();
                    }
                }

                yield return linha.ToArray();
            }
        }

        private static string ConvertByteArrayToString(byte[] bytes)
        {
            var sb = new StringBuilder();
            foreach (var b in bytes)
            {
                sb.Append(b.ToString("X2"));
            }

            return sb.ToString();
        }
    }
}