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In this video, the instructor explains how to protect personal files on Windows 10 by using the built-in Encrypting File System (EFS). EFS is available to most Windows 10 users, though not on Windows 10 Home editions. Data encryption is beneficial in various scenarios, such as preventing unauthorized access if the PC is lost or if multiple users share the same computer. For instance, an admin user can access files of a standard user unless those files are encrypted. The video begins with the admin signing in to demonstrate how to access user documents and emphasizes the importance of file encryption for privacy and security.