Shit happens, data is stolen (or leaked) and your account details, passwords and bank-account are available online to any criminal who wants it (or at least is prepared to buy it).
But don't panic, the data was encrypted so you're ok. Sit back, relax in front of the fire and have another mince pie (or six).
We see this time and again in the press. Claims that the data was encrypted... they did everything they could... blah blah blah. Humm, I think we need more detail.
It's common practice across many large organisations today to encrypt data using full-disk encryption with tools such as BitLocker or Becrypt. This is good practice and should be encouraged but is only the first line of defence as this only really helps when the disk is spun down and the machine powered off. If the machine is running (or even sleeping) then all you need is the users password and you're in. And who today really wants to shutdown a laptop when you head home... and perhaps stop for a pint on the way?
In the data-center the practice is less common because the risk of disks being taken out of servers and smuggled out of the building is lower. On top of this the disks are almost always spinning so any user/administrator who has access to the server can get access to the data.
So, moving up a level, we can use database encryption tools such as Transparent Data Encryption to encrypt the database files on the server. Great! So now normal OS users can't access the data and need to go through the data access channel to get it. Problem is, lots of people have access to databases including DBAs who probably shouldn't be able to see the raw data itself but who generally can. On top of this, service accounts are often used for application components to connect and if these credentials are available to some wayward employee... your data could be pissing out an open window.
To protect against these attack vectors we need to use application level encryption. This isn't transparent and developers need to build in data encryption and decryption routines as close to exposed interfaces as practical. Now having access to the OS, files or database doesn't do enough to expose the data. An attacker also needs to get hold of the encryption keys which should be held on separate infrastructure such as an HSM. All of which costs time and money.
Nothings perfect and there's still the risk that a wayward developer siphons off data as it passes through the system or that some users have too broad access rights and can access data, keys and code. These can be mitigated against through secure development practices, change management and good access management... to a degree.
Furthermore, encrypting everything impacts functionality - searching encrypted data becomes practically impossible - or may not be as secure as you'd expect - a little statistical analysis on some fields can expose the underlying data without actually needing to decrypt it due to a lack of sufficient variance in the raw data. Some risks need to be accepted.
We can then start to talk about the sort of ciphers used, how they are used and whether these and the keys are sufficiently strong and protected.
So when we hear in the press that leaked data was encrypted, we need to know more about how it was encrypted before deciding whether we need to change our passwords before tucking into the next mince pie.
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Nice piece of work. Begs the questions when we'll see Windows for Linux though ;)