Stegnography is the method by which data or files can be hidden in Image files or any other type of file. Well, Purpose can vary according to user.
E.g: We can send a stegnographic message to our friend by email which can be secretly shared only between you and your friend. If any other person accidentally or intentionally accessed your mailbox he can never figure out what you have sent in that image.Another example is , some hackers store their secret tools, virus scripts or malicious pieces of codes by the stegnography as a preventive measure against Law Enforcement.
It is not a rule that we must hide data in image files only, we can also hide data in MP3 and Video files too. Encryption is also based on same theme, but is less effective and can be used precisely only in local computing. Still, this method is widely used by advanced computer users for safety perspective. If we have to compare encryption to stegnography, stenography is simply done by software and there is no keys, ciphering and de-ciphering involved in it.
Now, consider a case where data is to be stored is very large and we have small files, then chances are more for creating curiosity. Therefore large file sized image is used for this purpose e.g Digital Images.
Technically this can possible because everything we store in computer is eventually in bits no matter whether it is in picture,program or a text file.
Following are some software used for Stegnography:
Invisible Secrets Safe
Quick Hide Files
MP3 Stegno (For Hiding in MP3 Files)
Another thing is if you want to search a stegnograph file or break its encryption following are some softwares:
StegDetect: This simple software detects such files stored on system or network.
StegBreak: Used to crack the password of such files by Dictionary attack.
Following is the screen shot of Image Hide