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In this paper, we present formalization and an implementation of a linear hashing algorithm in nested transaction environment to handle large amount of data with increased concurrency. Nested transactions allow parallel execution of transactions, and handle transaction aborts in our system. First, We formalize the nested transaction model in a linear has structure environment using well-known I/O automaton model. Next, we design a client/server model using layered system architecture. We have used object-oriented methodology in our system implementation that helps in designing and implementing the programming components formalized using I/O automaton model independently. In our model, buckets are modeled as automaton (later as objects) and linear hash operations are modeled as transaction automaton (later as methods). These methods correspond to nested transactions and are implemented using multithreading paradigm.