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Security Concerns with Encryption

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When we use a file as destination with encryption, I was thinking there might be some security issues worth to know about.

Each time I backup, SyncBackPro backups to that files without ever asking for the passwords. So this means it has the passwords stored somewhere. So this raises some questions.

I would like to know where and how SynckBackPro stores and uses the passwords? A third person can easily access them on hard drive and find what they are?

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