The art and science of hiding information by embedding messages within other, seemingly harmless messages. Steganography works by replacing bits of useless or unused data in regular computer files (such as graphics, sound, text, HTML, or even floppy disks ) with bits of different, invisible information. This hidden information can be plain text, cipher text, or even images.

Some common files used for hiding the data are .jpeg, .bmp, .jpg, .bmp, .pdf, .mp3, .wav, .gif, etc.

The following example gives detailed overview on how data can be hide by steganography :-
The tool used in this example is "S-Tools".
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1) Prepare the secret file that you want to hide (eg. '.txt')
2) Launch the steganography tool (eg. 'S-Tools')

3) Drag and drop the host file (image, audio or video) inside which you want to hide your secret file.(eg. 'Sachin.bmp')

4) Now, Drag and drop the secret file (eg. 'New Text Document.txt') over the host file (eg. 'Sachin.bmp'). As soon as you drop the secret file you will be alerted by s-tools to enter password and to choose encryption algorithm which can be further used to retrieve your secret file from the host file.

5) After entering password and encryption algorithm, click OK, the steganography tool will then create an identical copy of the host file (eg. 'hidden data.bmp') as shown below.

This identical copy actually consist of hidden data (your secret file), but it can never be differentiated from original one by human eyes.

6) The duplicate file containing hidden data can be saved by right clicking and selecting 'save as' option.
7) To reveal the hidden data from duplicate file (eg. hidden data.bmp'), open the file in steganography tool. Then right click and select 'reveal' option; you will be promted to enter password and proper encryption algorithm. As soon as you click OK you will be offered by 'reveal archive' as shown below :

This consist of exact secret file (eg. 'New Text Document.txt'). Then, you can save it to read the secret information.