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Steganography is an area of information security, that is related to Cryptogragraphy where the primary goal is to hide a secret message within a carrier(the carrier can be a message or some other medium).

Reasons for the use of steganography
Steganography is often used in an atmosphere of oppression, or when communications and activities must remain secret for fear of reprisal from a watching group or organisation (usually a government). Certain groups, and individuals holding beliefs that a ruling party considers a threat must keep the very fact of their communication secret, and in some circumstances must prevent the knowledge of the relationship between the communicating becoming known.

Steganography vs. Cryptography
Cryptography increases the privacy of communications between two or more parties, but it does not hide the fact that the parties have been communicating. And in certain environments(particularly in countries with authoritarian governments) the use of cryptography may attract unwanted attention, or the authorities may demand that the parties reveal the password or key to unlock their message. In a number of countries the use of cryptography is restricted or even illegal, and should the authorities choose to enforce the relevant laws the communicating parties would be forced to reveal their message or face a penalty (this may be a fine, jail time, or even torture). As a result cryptography can only provide increased privacy for the communicating parties(not protection).

Steganography is well suited to use in such environments where the use of cryptography is restricted or illegal, and provides a greater level of privacy than cryptography alone can, by hiding the very fact that communication occurred at all.

Physical steganography
Physical steganography is the use of a physical medium to carry the secret, hidden message.

Examples of physical steganography
Invisible Ink Knots tied on yarn at varying spaces and then knitted into a garment Microdots Puzzles (the message is only clear when all the pieces have been assembled)

Physical methods of detection
Detection of Physical steganography is time consuming and labor intensive.

Electronic steganography
With electronic steganography the secret message is hidden in a medium such as: A picture A Video file A sound file Generally any of these mediums contain some random data that the message can be stored in without much suspicion.

Spam can also be used as a steganograpic medium

Electronic methods of detection
Statistical analysis

Stegographic applications
All applications are OpenSource and have not been tested(by the author) StegHide Digital Invisible Ink Toolkit Hide Reveal Stegoshare Virtual Steganographic Laboratory

Famous examples of use in history
WWII Japanese use Chinese restance use Allies use

Cold war North Korea Soviet Union