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NetBSD disk encryption protects against stolen or lost devices by keeping data secret, though full disk encryption is challenging because the operating system needs unencrypted files to boot and requires password entry before decryption. The article explains that while system files like /bin/sh can reasonably remain unencrypted since they're identical across all NetBSD installations, sensitive user data in directories like /home, /var, and /usr/pkg should be encrypted, along with considerations for metadata storage, shared library dependencies, and potential performance penalties from software-based encryption algorithms.
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