The Complete Data Encryption Guide for 2023

Data breaches are an escalating threat, with the average cost of a breach now at $4.35 million according to IBM‘s 2022 report. Encryption is one of the most effective tools we have to protect sensitive information and mitigate risks. This comprehensive guide provides an in-depth look at current data encryption methods, standards, best practices and challenges to help you secure your data against threats.

The Rising Threat Landscape

Recent stats paint a grim picture of the data breach problem:

  • 1,862 data breaches occurred in 2021 exposing over 18 billion records (RiskBased Security)
  • Breaches cost $170 per lost or stolen record on average (IBM)
  • 95% of breaches are motivated by financial gain and espionage (Verizon)
  • 70% of breaches target personal data, healthcare records, credentials and financial information (Verizon)
  • Only 32% of data is encrypted overall (Entrust)
  • 52% of businesses fail to encrypt sensitive cloud data (Thales)

Lack of strong encryption directly enables these damaging breaches. Let‘s explore what encryption entails and how to use it effectively.

What is Encryption and Why Does it Matter?

Encryption converts plaintext information into ciphertext that cannot be read by unauthorized entities. It is applied using an algorithm and encryption key to scramble data. Decryption converts the data back into readable form using the correct decryption key.

Encryption provides crucial advantages:

  • Prevent data theft – encrypted data is useless to attackers without the keys
  • Enable compliance with regulations like HIPAA and PCI DSS
  • Preserve the confidentiality of trade secrets and IP
  • Protect customer privacy by securing sensitive records like health data
  • Ensure integrity by detecting any tampering with encrypted data

According to Entrust‘s 2022 Global Encryption Trends study, the #1 driver for deploying encryption is to protect customer information and PII.

How Encryption Algorithms Work

Encryption algorithms use complex mathematical transformations to convert plaintext to ciphertext. Some prominent algorithms include:

Algorithm Key Type Key Length Block Size Use Cases Vulnerabilities
AES (Advanced Encryption Standard) Symmetric 128, 192, 256 bits 128 bits Widely used standard for data at rest and transit, mandated by US FIPS 140-2 Resistant to all known attacks
RSA Asymmetric 1024+ bits Variable Secure web communications, digital signatures and certificates Vulnerable to inefficient padding schemes
Blowfish Symmetric 32-448 bits 64 bits File and database encryption, e-commerce transactions No significant weaknesses known
ECC (Elliptic Curve Cryptography) Asymmetric Up to 512 bits Variable Mobile and smart card applications, key establishment Some concerns over generating random keys

Understanding these algorithms allows you to choose the right encryption method for different use cases based on strength, performance needs and compliance rules.

For example, AES would be a good choice for performance-sensitive database encryption, while RSA is commonly used for TLS web encryption thanks to small key sizes.

Deploying Encryption Best Practices

Encryption alone is not enough – it must be implemented correctly following best practices to ensure security. Here are key guidelines to follow:

Secure Key Management

The encryption keys themselves need to be protected from unauthorized access, loss or theft. Recommended practices include:

  • Use a key management system (KMS) or hardware security module (HSM) to generate, store and control access to keys.
  • Enforce key rotation policies based on guidance from NIST – the recommended minimum is every 2 years.
  • Transmit keys only over encrypted channels.
  • Mask or encrypt keys at rest – don‘t store them in plaintext!
  • Destroy keys completely when no longer needed.

Defense in Depth

Apply encryption across layers for defense in depth:

  • Encrypt data at rest and in transit
  • Use VPNs to encrypt connections
  • Enable full disk and file encryption where needed
  • Encrypt entire databases or just sensitive columns
  • Combine with access controls and data masking

The Cloud and Encryption

Pay special attention to cloud encryption:

  • Classify cloud data sensitivity and residency requirements
  • Enable native cloud app encryption features
  • Encrypt data before uploading to cloud storage
  • Manage keys independently of cloud provider (hold your own keys)
  • Require cloud encryption for vendors and business partners

Promote Awareness

Get staff onboard with training on:

  • Secure key handling androtation policies
  • Reporting suspected exposure of keys
  • Dangers of hardcoding keys in code or configs
  • Recognizing and avoiding phishing for keys

Regularly Audit and Test

Continuously verify your encryption posture:

  • Pen test to confirm data is not exposed when exfiltrated
  • Scan for cleartext instances that should be encrypted
  • Check for use of outdated or weak algorithms
  • Review configs and key access logs for misuse
  • Backup and check restoration of encrypted data

This allows you to fix issues before a breach.

By taking a proactive approach to monitoring and assessing your encryption maturity over time, you can ensure your data remains secured against evolving threats.

Overcoming Key Encryption Challenges

Deploying encryption poses valid technical and financial challenges including:

Performance Overhead

Encryption taxes compute resources. Mitigation strategies:

  • Optimize algorithms and key sizes to reduce overhead
  • Use hardware acceleration like GPUs and encryption chips
  • Add infrastructure capacity

Key Management Complexity

Tracking keys across many systems is difficult. Steps to simplify:

  • Centralize keys in a KMS or HSM
  • Automate key rotation and rollover
  • Use patterns like key derivation functions and hierarchical keys


Upfront and ongoing costs like encryption licenses, HSMs and key admin. Tactics to control costs:

  • Prioritize encryption only for sensitive data
  • Start with native OS and cloud provider encryption features
  • Evaluate open source and commercial options to find cost-efficient solutions

Legacy Compatibility

Old systems may not work with encrypted data. Options to enable compatibility:

  • Use format-preserving encryption (FPE)
  • Try partial database field encryption
  • Migrate older systems to newer platforms with encryption built-in

Looking at the Future of Encryption

As quantum computing emerges, we will need to transition to quantum-safe encryption resistant to brute force attacks. Other promising developments include:

  • Homomorphic encryption allowing computation on encrypted data
  • Lightweight crypto for IoT devices
  • Encryption-friendly chip architectures like ARMv8.3-A

Businesses should stay on top of these innovations to keep their data secure against modern threats.


Encryption provides one of the strongest defenses against escalating cyber attacks and untrusted environments. To maximize data protection, organizations must make encryption a priority, provide adequate budget and resources, and implement industry best practices.

With a comprehensive data-centric security strategy built on strong encryption, businesses can keep their most valuable asset – data – safe and prevent catastrophic breaches.

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