Computer security is hard. Software, computer and network security are all ongoing battles between attacker and defender. And in many cases the attacker has an inherent advantage: He only has to find one network flaw, while the defender has to find and fix every flaw.

Cryptography is an exception. As long as you don't write your own algorithm, secure encryption is easy. And the defender has an inherent mathematical advantage: Longer keys increase the amount of work the defender has to do linearly, while geometrically increasing the amount of work the attacker has to do.

Unfortunately, cryptography can't solve most computer-security problems. The one problem cryptography can solve is the security of data when it's not in use. Encrypting files, archives – even entire disks – is easy.

All of this makes it even more amazing that Her Majesty's Revenue & Customs in the United Kingdom lost two disks with personal data on 25 million British citizens, including dates of birth, addresses, bank-account information and national insurance numbers. On the one hand, this is no bigger a deal than any of the thousands of other exposures of personal data we've read about in recent years – the U.S. Veteran's Administration loss of personal data of 26 million American veterans is an obvious similar event. But this has turned into Britain's privacy Chernobyl.

Perhaps encryption isn't so easy after all, and some people could use a little primer. This is how I protect my laptop.

There are several whole-disk encryption products on the market. I use PGP Disk's Whole Disk Encryption tool for two reasons. It's easy, and I trust both the company and the developers to write it securely. (Disclosure: I'm also on PGP Corp.'s Technical Advisory Board.)

Setup only takes a few minutes. After that, the program runs in the background. Everything works like before, and the performance degradation is negligible. Just make sure you choose a secure password – PGP's encouragement of passphrases makes this much easier – and you're secure against leaving your laptop in the airport or having it stolen out of your hotel room.

The reason you encrypt your entire disk, and not just key files, is so you don't have to worry about swap files, temp files, hibernation files, erased files, browser cookies or whatever. You don't need to enforce a complex policy about which files are important enough to be encrypted. And you have an easy answer to your boss or to the press if the computer is stolen: no problem; the laptop is encrypted.

PGP Disk can also encrypt external disks, which means you can also secure that USB memory device you've been using to transfer data from computer to computer. When I travel, I use a portable USB drive for backup. Those devices are getting physically smaller – but larger in capacity – every year, and by encrypting I don't have to worry about losing them.

I recommend one more complication. Whole-disk encryption means that anyone at your computer has access to everything: someone at your unattended computer, a Trojan that infected your computer and so on. To deal with these and similar threats I recommend a two-tier encryption strategy. Encrypt anything you don't need access to regularly – archived documents, old e-mail, whatever – separately, with a different password. I like to use PGP Disk's encrypted zip files, because it also makes secure backup easier (and lets you secure those files before you burn them on a DVD and mail them across the country), but you can also use the program's virtual-encrypted-disk feature to create a separately encrypted volume. Both options are easy to set up and use.

There are still two scenarios you aren't secure against, though. You're not secure against someone snatching your laptop out of your hands as you're typing away at the local coffee shop. And you're not secure against the authorities telling you to decrypt your data for them.

The latter threat is becoming more real. I have long been worried that someday, at a border crossing, a customs official will open my laptop and ask me to type in my password. Of course I could refuse, but the consequences might be severe – and permanent. And some countries – the United Kingdom, Singapore, Malaysia – have passed laws giving police the authority to demand that you divulge your passwords and encryption keys.

To defend against both of these threats, minimize the amount of data on your laptop. Do you really need 10 years of old e-mails? Does everyone in the company really need to carry around the entire customer database? One of the most incredible things about the Revenue & Customs story is that a low-level government employee mailed a copy of the entire national child database to the National Audit Office in London. Did he have to? Doubtful. The best defense against data loss is to not have the data in the first place.

Failing that, you can try to convince the authorities that you don't have the encryption key. This works better if it's a zipped archive than the whole disk. You can argue that you're transporting the files for your boss, or that you forgot the key long ago. Make sure the time stamp on the files matches your claim, though.

There are other encryption programs out there. If you're a Windows Vista user, you might consider BitLocker. This program, embedded in the operating system, also encrypts the computer's entire drive. But it only works on the C: drive, so it won't help with external disks or USB tokens. And it can't be used to make encrypted zip files. But it's easy to use, and it's free.

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Bruce Schneier is CTO of BT Counterpane and author of Beyond Fear: Thinking Sensibly About Security in an Uncertain World. You can read more of his writings on his website.

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