data security

Whatʼs a difference VDR to other types of solutions such as data encryption?

Nothing better than cryptographic protection has been invented to combat the threat of compromising personal data. The time-tested method of cryptographic security of information does not lose its relevance today and is implemented into modern data room solutions. So, why using this full-packed software is better?

How to protect data in modern reality: from encryption to data room

Data is the basis of digitization and innovative companies. Traffic has increased significantly during the pandemic and will continue to grow in the post-pandemic era. Data exchange is becoming increasingly important for small and medium-sized companies and is already possible and necessary today. For this purpose, businesses used innovative corporate solutions based on data encryption.

Encryption is one of the essential tools for protecting corporate files. A data security breach has some business risks, ranging from the loss of intellectual property to the leakage of confidential information. It can damage the reputation of the company, as well as lead to the payment of large fines. Almost all cloud services advertise encryption, but they usually only mean HTTPS or server-side encryption. The provider processes your data unencrypted and has full access to your sensitive data.

The virtual data room offers end-to-end encryption and thus provides the highest level of data protection in the cloud. End-to-end encryption means sensitive data is already encrypted on the user’s device. The IT operator cannot access the keys and cannot read the sensitive data. All sensitive information is already encrypted on the user’s end device. Therefore, most modern companies introduce this software to arrange secure business collaboration for M&As, due diligence, venture capital, startups, or real estate deals. For example, data room for startups offers a set of enterprise management programs that operate on the same technological platform, use the same database, and are synchronized with each other in real time. When entrepreneurs need to share their startup project data with investors, it is vital to do it confidentially. This platform ensures several reliable security measures.

How does data room encryption work?

If a user uploads files to an encrypted data room, the public keys of all users who have access to this data room are first downloaded to the user’s end device. A random file key (256-bit) for the file to be uploaded is then generated on the user’s end device. This file is then symmetrically encrypted with the random file key and transmitted in encrypted form to the data room. For each user who has access to the encrypted data room with the newly uploaded file, the file key must be asymmetrically encrypted with the public key of the respective user and stored in the database. The upload of a file, therefore, only requires the provision of a few user file keys.

So, the data room security structure ensures the following functions:

  • Protection from hackers

Even cloud services are not 100% safe from hackers, as proven by successful attacks on services such as Dropbox in the past. In the data room, your sensitive data will be unreadable to attackers due to end-to-end encryption.

  • Additional HTTPS

The software use HTTPS to protect all communication with you over the Internet. You can also access the data room via an insecure public WLAN.

  • Modern encryption method

The data upload to the data room or the creation of folders is always encrypted. The same applies to creating and changing passwords. The encryption takes place locally on your computer. Thus, servers never see passwords in plain text. It is the principle of “Zero-Knowledge.”