TrueCrypt is a software system for establishing and maintaining an on-the-fly-encrypted drive. On-the-fly encryption means that data are automatically encrypted or decrypted right before they are loaded or saved, without any user intervention. No data stored on an encrypted volume can be read (decrypted) without using the correct password or correct encryption key. Until decrypted, a TrueCrypt volume appears to be nothing more than a series of random numbers. The entire file system is encrypted (i.e., file names, folder names, contents of every file, and free space).
This software is highly recommended for securing data on laptops.
TrueCrypt performs the following tasks:
Creates a virtual encrypted disk within a file and mounts it as a real disk.
Encrypts an entire partition or storage device such as USB flash drive or hard drive.
Encrypts a partition or drive where Windows is installed (pre-boot authentication).
Encryption is automatic, real-time (on-the-fly) and transparent.
Provides two levels of plausible deniability, in case an adversary forces you to reveal the password: 1) Hidden volume (steganography) and hidden operating system. 2) No TrueCrypt volume can be identified (volumes cannot be distinguished from random data).
Encryption algorithms: AES-256, Serpent, and Twofish. Mode of operation: XTS.