There are three data security concerns that need to be addressed - confidentiality, authentication, and non-repudiatability. Confidentiality ensures that the data is readable only by the intended recipients. Authentication provides protection against unauthorized access or forgeries. Non-repudiatability ensures that someone cannot deny having conducted a transaction . The steps needed to curb the security concerns on the Internet are three fold. First is a balance between industry self-regulation and laws to deter unscrupulous practices. Second would be the education of the Internet user base on their rights and tools to ensure their protection while online. Lastly, the continuous advent of technology as it matures the Internet and provides us with newer more powerful tools that will enhance the current economic boom that many regard as an Internet phenomenon.
So how do you secure sensitive data? Well if it is so sensitive that it cannot be comprimised under any circumstances, then the only sure fire security precaution is to take it off any networks. There must be an "air gap" between this system and the rest of the network. But first one would be to ensure that the physical location has been secured. Access to the network would be limited to those who need it and control be exercised by a combination of security methods (passwords, smartcards, biometrics). Biometrics always brings up the question of privacy. And in applications where the masses would be affected, this is a valid concern. But biometrics can be very useful if one is trying to control access or verify the identity of a smaller number of people. This is also advisable due to the error rates currently seen in biometric systems (~ 0.01%). And the answer to securing data during transmission is Encryption.
When it comes to personal computers, ensuring security is a more manageble matter. If you store sensitive material on your home computer you should consider using an encryption program like PGP or Private File. Any computer that is connected to a broadband (DSL/Cable/Satellite) connection requires an extra layer of protection. You should consider either a good personal firewall and/or a firewall router - the firewall router will also allow you to share your internet connection with other PCs in your home.
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