What are the risks? Where are the vulnerabilities?
Is my Dropbox encrypted?
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Your Dropbox is encrypted during transmission and while stored on their servers. Dropbox themselves do, however, have access to there files but it is against their policy to look at your files (note that it's against policy though technically possible).
If you're concerned with the security of your files on any of these services, the solution is to encrypt your files locally inside an encrypted disk image and then sync that image with dropbox. You'll lose the ability to read your files on mobile devices but on any computer you'll be able to mount the image and get access to your files.
It all depends on just how sensitive your information is. If you're looking for real security for your files, encrypt them before you upload them.
As others have already mentioned, Dropbox encrypts anything that isn't in your public folder for you with AES using a 256-bit password, which would take longer than the age of the universe to crack by brute force. This works for protecting your files against hackers, but if anyone gets your dropbox login information it's game over. Also, Dropbox can decrypt these files and view them, and will hand your unencrypted files over to the government if it is required of them.
However, if you encrypt these files yourself with something strong (like the aforementioned AES 256), have a sufficiently long password and take proper steps to protect your password, your files will be very secure.
Amazon doesn't do any encryption for you, so if you want any protection if Amazon's services get hacked, you'll need to encrypt the files yourself.
So, long story short - if you really care about protecting your files, you'll encrypt them yourself using a strong encryption method (like AES 256) and a long password that you take proper steps to protect. Any sort of built-in encryption on online services still leaves you vulnerable to hackers and the government seeing your files. Anyone can get into your files if your username and password are stolen. However, if you encrypt those files yourself, it becomes much, much, much harder for them to view your files.