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Is it better to encrypt the hard drive you will use for Time Machine backup with Disk Utility or with Time Machine itself? I have noticed the the dialogue is slightly different, wherein Disk Utility a hint is not required, but with Time Machine it is... are there any other differences under the hood?

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The best answer is to try it yourself. From what I can recall, though, using the encryption option of Time Machine makes an encrypted sparse bundle (a file) on an unencrypted disk, whereas the Disk Utility approach encrypts the entire disk.

Both methods are pretty rock solid (especially for the needs of insignificant consumers), so pick whichever seems more useful.

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