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> the phrases "stored in a file" and "hidden volume within another volume" are red flags.

Why? Files are lot easier than full partition encryption. And how else would you hide a volume with anything like plausible deniability?

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If entire disk appears to be empty - it is much more plausible to have an argument that this is indeed just an empty spare. If you have a "hidden" file -- that file can be found to begin with -- _something_ in the file system will be pointing at it. And then - a large file filled with random data - that's one hell of a red flag if I ever saw one.

It's not an actual file, it's unmarked in the free space of the first volume. If you mount only the first volume, it will appear normal, and data loss will occur if more space is used.

https://www.truecrypt71a.com/documentation/plausible-deniabi...

Also, as jchw mentioned above, the headers are indistinguishable from random data already, and truecrypt supports full volume encryption already. This nesting feature is on top of the "volume looks like random data" feature.

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