Businesses are now recording as much information about their customers as possible. While this information is useful for increasing sales, it also comes with the responsibility of keeping it private. Unfortunately, this is something that many businesses fail at.

The primary way to keep data private is to use encryption. Once data is encrypted, it cannot be accessed by anyone unless they have the password. There are two ways to encrypt files—through hardware-based or software-based methods.

So, what is the difference between physical drive encryption and software drive encryption? And which one should you use?

Why Is Encryption Important?

padlocked shield

You should encrypt data to prevent unauthorized users from accessing and stealing it. It's, therefore, something that both businesses and private individuals alike should use.

If private data is stolen from a business, they risk their customer's information being used or sold, their reputation harmed, and being asked for a ransom not to publish it online.

While businesses are the primary targets, private individuals are also potential targets. Attacks against individuals often involve financial information which can be used to make unauthorized purchases. The stolen personal information from individuals can also be used for identity theft.

What Is Software Drive Encryption?

A lock on a screen with binary numbers

Software encryption uses programs and a computer's processor to encrypt files. Although the data can be stored on a portable drive, the computer performs the actual encryption. Software encryption uses a password as an encryption key.

Pros and Cons of Software Drive Encryption

Software encryption is popular because it is affordable and easily accessible. It is not, however, suitable for all purposes. Nevertheless, it still has its place in data security. So, these are the advantages and disadvantages of using software encryption.

Pros: Software Encryption Is Easy to Use

Software encryption can be installed on almost any computer and used with any drive. Unlike physical encryption, a business doesn't need to distribute hardware to employees. You also do not need to keep a physical device in your possession to use software encryption.

Pros: Software Encryption Is Affordable

Software encryption is often cheaper than physical encryption. For example, some of the best software encryption programs are free, whereas physical encryption requires hardware purchases.

Cons: Software Encryption Affects Performance

Software encryption uses your computer's processor, affecting its performance while encrypting or decrypting data. Physical encryption does not affect system performance, which is an important distinction when massive amounts of data are involved.

Cons: Software Encryption Is Potentially Vulnerable

Software encryption is only as secure as the operating system that the software is installed on. Hackers infiltrating the OS might compromise the system and break the encryption. They could also attempt a brute force attack to decrypt the protected files.

Although many encryption apps protect against brute force attacks by limiting the number of password attempts before locking the system, a hacker who's infiltrated the system might be able to disable this feature. This would let the hacker have unlimited attempts at cracking the password.

What Is Physical Drive Encryption?

Image of Padlock on Binary Representing Security

Physical encryption uses hardware to protect your files. The encryption is handled by the physical device's processor and doesn't rely on your computer's operating system. This is superior to software drive encryption because even if the system has vulnerabilities, it cannot be exploited to give unauthorized access to the protected data. Furthermore, physical drive encryption does not slow down the system.

Furthermore, physical encryption uses encryption and decryption keys generated by the physical device, thus reducing its chances of being compromised.

Pros and Cons of Physical Drive Encryption

Physical encryption offers increased security and does not affect performance. However, it's not a solution for everyone.

Pros: Physical Encryption Is Not Vulnerable

Physical encryption is far more secure than software drive encryption because it isn't dependent on the computer's OS. Even if the computer is compromised, the encrypted data remains secure because its encryption is stored separately. Furthermore, brute force attacks are also ineffective because the physical device automatically limits password attempts.

Pros: Physical Encryption Does Not Affect Performance

The physical device's processor handles physical encryption. This allows the user to encrypt or decrypt large amounts of data without slowing their computer down.

Cons: Physical Encryption Is More Expensive

Physical drive encryption requires hardware purchase. This is particularly an issue for businesses with many employees that need to buy a key for each authorized personnel.

Cons: Physical Encryption Is Difficult to Upgrade

Physical keys cannot be updated automatically, making them more challenging to upgrade versus an encryption app. Some physical encryption drives cannot be upgraded and must be replaced if their encryption method becomes unsuitable.

Physical Drive Encryption vs. Software Drive Encryption: What's the Difference?

These are the primary differences between physical drive encryption and software drive encryption.

Software Drive Encryption

Physical Drive Encryption

Price

Software encryption programs are often available to use for free.

Physical encryption requires the purchase of hardware.

Ease of Use

Software encryption is easier to use.

Physical encryption requires possession of hardware and is difficult to upgrade.

Performance

Software encryption affects performance because the system's processor handles encryption and decryption.

Physical encryption does not affect performance because the physical drive's processor handles encryption and decryption.

Security

Software encryption is only as secure as the system's OS. Software encryption may be defeated using brute force attacks.

Physical encryption is significantly more secure. Vulnerabilities in the system's OS are irrelevant. Brute force attacks are ineffective.

Who Should Use It

Software encryption should be used by anyone who prioritizes price. It is useful for personal use and for protecting general information.

Physical encryption should be used by anyone who prioritizes security. Businesses should use it for customer information or to protect significant assets like cryptocurrencies.

Physical Drive Encryption Is Often Necessary

Encryption is crucial for storing private information. Without it, anyone who accesses the device where your data is stored could retrieve and read it.

Software drive encryption is significantly cheaper and easier to use. It is, therefore, ideal for protecting general information, like records and archives.

But if you need to protect more sensitive information, like passwords and banking details, you should opt for physical drive encryption. And if other parties, like your customers, entrust you with their information, physical drive encryption is the only type suitable for protecting that data.