The most crucial activity in system hacking is cracking passwords. This is because passwords provide the primary means of authentication and access control for computer systems. Without cracking passwords, a hacker cannot gain access to sensitive information or carry out unauthorized actions.

Information Gathering:
While information gathering is an essential part of system hacking, it is not the most crucial activity. It involves gathering information about the target system, such as its network topology, operating system, and software applications. This information is used to identify vulnerabilities that can be exploited to gain access to the system.

Covering Tracks:
Covering tracks is another important activity in system hacking, but it is not as crucial as cracking passwords. It involves deleting logs, hiding files, and covering up any evidence of the intrusion to avoid detection. However, if a hacker is unable to crack passwords, they will not be able to gain access to the system in the first place, making covering tracks unnecessary.

Cracking Passwords:
Cracking passwords is the most crucial activity in system hacking because it allows a hacker to gain access to a system and carry out unauthorized actions. Password cracking involves using software tools and techniques to guess or brute-force passwords until the correct one is found. Once a hacker has access to a system, they can steal sensitive information, install malware, or carry out other malicious activities.

In conclusion, while information gathering and covering tracks are important activities in system hacking, cracking passwords is the most crucial. Without the ability to crack passwords, a hacker cannot gain access to a system and carry out unauthorized actions.