A software based encryption system serves to encrypt the data that is stored on your computerโ€™s mass storage. When a user types in a password at the beginning of a session, this software decrypts the information so that it can be read only by that authorized user. These encryption systems may also have built-in plausible deniability, which simply means that an unauthorized user cannot determine that the encrypted information even exists.

Due to the volume level of this type of system, software based encryption is ideal for use in portable devices, such as laptop computers and flash drives. If your portable device is lost or stolen, an unauthorized user cannot access your data without the proper password. That is why it is so important to choose a password that is not to obvious (for example your name) and has relevance only to you.

There are several different types of this software based encryption available. Non-transparent file encryption performs by encrypting only individual files. The whole file is stored in a temporary file in an encrypted form, which is then decrypted when you pull it up. Types of this software (which is known as special purpose software) include GNU Privacy Guard and PGP. File archivers and text editors are also software based non- transparent encryption systems that are available.

Many of these software based encryption systems also offer two levels of plausible deniability. This added protection prevents an unknown user from being able to prove that the encrypted information exists.

These encryption systems may also include a feature that is known as hidden volumes. These volumes are hidden inside a container volume and need to be accessed with a different password or encryption key. The container volume is also known as the outer volume while the hidden volume is the inner volume. The user can store information that looks important in the outer volume to act as a decoy if an unauthorized user would happen to gain access to the system. The actual important, sensitive material is stored in the inner volume, remaining undetected and protected. This is effective protection if for some reason the user is forced to reveal his password. Since the two volumes have two different passwords, the user can reveal the outer volume password while the material in the hidden volume can remain concealed.

Software based encryption systems also have no identifying features. This feature makes a user unable to tell if a file has been encrypted or not. It also makes it impossible to tell if a volume contains a concealed data inside.

There is also temporary drive software available that you can install to encrypt your data. This portable type of software based encryption does not need to be installed into a hard drive, although administrative privileges will still be required.

Software based encryption software is a good, less expensive way to protect your data and encrypted USB flash drives are a great way to protect your portable data.