Let me rephrase: If you're only trying to decompress your back, there are much better options than hanging, and here's why:
Hanging itself is a great exercise, if done right and for the appropriate reasons. It's great for grip strength, and you can work on various things like shoulder mobility, posture, pelvis stability, and a bunch of core stuff. However, if you're just trying to decompress your back, you could be doing more damage than good, or nothing at all.
Only one of these guys is smart enough to realize he's not going anywhere with that wheel....
When your spine is compressed, it's typically because the muscles that attach to it are pulling the vertebrae together in an attempt to create stability because there is a lack of stability in the other core muscles (like your abs, but as stabilizers, not movers, so we're not talking sit ups or crunches, here, folks!).
These things all attach to the spine, and are capable of causing compression along the spine.
Oh, we haven't even gotten to the common muscles defined as "core muscles," either!
If you are hanging, it's also a good idea to activate your lats so your shoulder joint stays strong instead of decompresses as well (if you have rounded/hunched shoulders, your shoulders are probably TOO decompressed already). The thing is, your lats attach to the lower half of your spine, which is exactly what you're trying to decompress. So that's a little contradictory right there.
See? There's more stuff that attaches to the spine!
Another thing about hanging is that when they're done, people tend to just let go of the bar and drop down, usually not landing like a ninja, but rather like Andre the Giant playing hopscotch. This puts the compression right back in your spine, and could cause even more compression, because of the shock and recoil from being stretched out for so long (you know how your hammies feel after you stretch them too much?).
"I think I'm going to feel this in the morning...."
Grip strength and endurance is another thing many people lack. If you can't hang on the bar unsupported for more than 10 seconds, you have no business being on the bar for anything therapeutic. Your brain will be thinking about how to hold on for dear life rather than the specific instructions you'll want it to give the muscles in your body as far as relaxing/contracting. Your brain operates in order of importance, where survival is #1.
Do you think this person is capable of doing anything other than scream and pee their pants? No?
Yea, that's what I thought, too.
Usually when people hang for decompression, they already have pretty terrible core posture, with an anterior pelvic tilt and posterior thoracic tilt, which is probably a decent contributor to why their back feels tight, since there is no anterior trunk stability, and posterior trunk compression. Hanging passively just exacerbates that. Add some bad shoulders in there, and you've got yourself a cocktail of "why does my back hurt all the time?"
This guy will tell you how it feels to have a compressed spine.
Don't be Wile E. Coyote.
How should you decompress your back, then?
Well, hanging is fine, really. Just do it correctly.
First things first, don't be super high off the ground. You're going to want to have as little of a drop as possible, straight legged distance. Plan ahead. A few inches is enough. Also, you should already have the shoulder range of motion to support yourself with arms overhead and no rib flare. If you can't do that while laying on the ground, you shouldn't hang.
Do like this guy before you attempt any hanging stuff.
When you grip the bar, keep the elbows locked and grip pronated (if overhand), and keep your head in neutral. This is when you can let the rest of your body relax, and your spine can decompress. The next part is CRUCIAL to create stability in the decompressed state: Tilt your pelvis backward (so a super mini butt tuck, not arch back) so that you feel it in your lower abs a few inches below your belly button (you can also squeeze your knees together slightly or a yoga block between the knees). You should not be rounding your low back to do this. Hold that, tuck your chin slightly without having your head come forward much. Then, with arms still locked, tuck your lower ribs in towards your spine, and bring your shoulders down towards your butt and try to close your armpit with your upper chest and your upper armpit (yes, I'm aware of how weird that sounds, but try it, you'll see what I mean). All this should be done without sacrificing any of the previous steps. Hold for a couple nice breaths, and then either repeat the whole process starting with the hang, or just come down (remember, like a NINJA, not Andre the Giant!!), and then do it again when your muscles have recovered.
Notice how the movements are slow and subtle, not quick or big movements. We're working core stability, not extremity strength (although you do need to have a pretty decent grip to be able to do this for several reps in a row). As mentioned before, you will also need to at least be able to hang from the bar in general for slightly more duration than one rep on the bar to have your brain be ok with you doing this kind of stuff (otherwise it freaks out because you're trying to do too much). So, if one rep takes, say, 10 seconds, you should be able to hold onto the bar as a free hang for 15, no problem. If you can't, then your first step is to build up your grip strength and hang time. It's important that when doing therapeutic type movements (like these), you need to be able to do them controlled, and not to fatigue (meaning you still have gas in the tank for more, but you're not going to use it.....80% rule, anyone?). This can mean just one rep at a time, rest for a minute or so, and then have at it again.