FreeOTFE was initially released by Sarah Dean in 2004, and was the first open source code disk encryption system that provided a modular architecture allowing 3rd parties to implement additional algorithms if needed. Older FreeOTFE licensing required that any modification to the program be placed in the public domain. This does not conform technically to section 3 of the Open Source definition. Newer program licensing omits this condition. The FreeOTFE license has not been approved by the and is not certified to be labeled with the open-source certification mark. This software is compatible with Linux encrypted volumes, allowing data encrypted under Linux to be read freely. It was the first open source transparent disk encryption system to support Windows Vista and PDAs. Optional two-factor authentication using smart cards and/or hardware security modules was introduced in v4.0, using the PKCS#11 standard developed by RSA Laboratories. FreeOTFE also allows any number of "hidden volumes" to be created, giving plausible deniability and deniable encryption, and also has the option of encrypting full partitions or disks.
Portable use
FreeOTFE can be used in "portable" mode, which allows it to be kept on a USB drive or other portable media, together with its encrypted data, and carried around. This allows it to be used under Microsoft Windows without installation of the complete program to "mount" and access the encrypted data through a virtual disk. The use of this mode requires installing device drivers to create virtual disks, and as a consequence administrator rights are needed to start this traveller mode. As with most open source software that uses device drivers, the user must enable test signing when running Windows Vista x64 and Windows 7 x64 systems.
Driverless operation
Packaged with FreeOTFE is another program called "FreeOTFE Explorer", which provides a driverless system that allows encrypted disks to be used without administrator rights. This allows FreeOTFE encrypted data to be used on public computers found in libraries or computer kiosks, where administrator rights are unavailable. Unlike FreeOTFE, FreeOTFE Explorer does not provide on-the-fly encryption through a virtual drive. Instead it lets files be stored and extracted from encrypted disk images, in a similar manner as ZIP and RAR archives, by using a Windows Explorer like interface.
Algorithms implemented
Due to its architecture, FreeOTFE provides great flexibility to the user with its encryption options.
FreeOTFE originally offered encryption using cipher-block chaining with encrypted salt-sector initialization vector, though from v3.00 introduced LRW and also the more secure XTS mode, which supersedes LRW in the IEEE P1619 standard for disk encryption.
Hashes
As with its cipher options, FreeOTFE offers many different hash algorithms:
