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In this episode, we explore active record encryption, which is essential for data protection. Unlike hashing, used in authentication methods (where the original data cannot be retrieved), active record encryption allows for reversible encryption. This means that data can be encrypted when stored in the database and decrypted when needed, such as in a view. In our example, we encrypt a description and passphrase when creating a user. Although the process seems routine, the application logs reveal that the original data, like "taco soup," is transformed into an encrypted format upon user creation, highlighting the importance of data security at rest.