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In this video, the concept of steganography is discussed, which involves hiding data within other data. The speaker explains that while third parties may recognize a data exchange, they remain unaware of any secret messages concealed within it. This contrasts with encryption, where the existence of a secret message is known, but decryption is contingent upon possessing the correct key. To implement steganography, specialized software is necessary for embedding and revealing hidden messages. Additionally, forensic experts utilize tools to detect irregularities in files that may indicate steganographic techniques. The video highlights various historical applications of steganography, such as concealing encrypted files within the color bits of JPEG images.