Folder hiding is a simple way of keeping prying eyes away from your private documents. From a human point of view it's a good solution; what you can't see, you don't know you want. Encrypting a folder can have the opposite effect. The folder is visible and if access is attempted, the need to enter a password positively shouts the message that someone is trying to hide something. The Windows hidden attribute works similarly to the more familiar "read only" attribute. It's a property of every file and folder that can be turned on or off.
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