The software that Elliot used to mask the data was DeepSound. It's indeed steganography.
[This thread on /r/mrrobot](//reddit.com/r/MrRobot/comments/3gua5x/spoilers_for_anyone_wondering_why_elliot_would/) discusses it (obvious spoilers within, for those who have yet to see it).
Did you honestly expect this paranoid person to store his data files in the cloud, say on his Dropbox or iTunes account, I'm sorry, I meant to say the NSA's inbox?
Once he burned his data files to the disc and scrubbed the free space on his computer, those data files only exist on those discs and no where else. Unless you have physical access to those discs, it's unavailable anywhere else.
Using a program such as DeepSound which can hide your data files inside media files, you can hide data files in plain sight.
To the untrained eye who looks at the label, that person would see a music collection. If an incompetent investigator were to simply open those media files to "test them", a media player would play those media files and the investigator would move on to something else.
An investigator worth his or her salt would look for hidden files within those media files. Even if they did find the hidden files, Elliot would have encrypted them anyway.
I'm from the old school, did you know that you can hide stuff inside picture files using ancient DOS commands and Zip files? Yep!
copy /B oldpicture.jpg+datafile.zip newpicture.jpg
The resulting newpicture.jpg file will be the combined size of the original .jpg along with the .zip file. This is the poor man's steganography.
Open up a command windows and play with it, it works. Wisely, you will use these new skills young Padawan. Mhmmmm.
If you view newpicture.jpg in a picture viewer, it'll display the picture. If you use a popular compression program such as WinZip, 7Zip, WinRAR or pretty much any other Zip program to open the newpicture.jpg, you can extract the .zip archive from the .jpg file.
This is NOT a secure way to hide stuff but it will be overlooked by the untrained eye, a professional would laugh at your |V|4ds|<illz.
A flash is too obvious. Even a layperson would recognize a flash drive for file storage.
The way Elliot encrypts his files using DeepSound then labeling the CDs with Artists/Album, a layperson would easily overlook them.
I work in software, but am very interested in security. I'd say that Mr. Robot may be the most realistic "hacker" show that I've seen on television. I know that Sam Esmail has several people from in the field advising him, which only makes it more authentic.
From a security standpoint, I actually learned something new last night. Elliot stores information inside of audio files using DeepSound, but it looks like a normal CD to anyone else. I also like how the producers made sure that Elliot loaded DeepSound through a VM (Virtual Machine), as well as using the correct linux commands throughout the show. I also love the use of the Raspberry Pi in the air control system.
Not really understanding where you see the plot hole. Elliot still has three missing days after the 5/9 hack. He goes to prison on 5/12. Mr. Robot had plenty of time to do plenty of stuff - including copy files onto CDs.
Regarding the CDs, we see Elliot using Deepsound to hide the files in actual audio tracks. Anyone looking at the CD would see working audio files.
Where this falls apart for me is that the FBI should be very, very, very, VERY, interested in the guy working on E Corp cybersecurity who just got arrested for criminal hacking. You'd think they'd have their forensics people combing over everything the NYPD took from Elliot's apartment. Including those CDs. And the subterfuge wouldn't survive a close inspection by people who know what they're doing.
That doesn't mean the FBI could break the encryption on the files even if they found them. They might just know that Elliot has a bunch of stuff hidden in those discs.
But I think the answer we're supposed to accept for all of this is that the FBI didn't look, or didn't "find anything" because the Dark Army told them not to.
Edit to add: By the end of Season 3 about two months have passed since Elliot got out of prison. Plenty of time for him to get his stuff from the NYPD and put it back where he wants it.
Not quite. He's using a program called DeepSound, which hides actual files inside of actual audio files. Then he burns the audio as a data CD, which to anyone who listens to it just sounds like a normal mp3 CD.
Well, something needs to be stored as music. According to the Slovakian maker Jozef Batora's documentation, there are three settings - if you set the audio quality to low, you can hide 50% of original audio size, at the highest settings, only 1/8th.
I guess going higher on data vs audio would make audio sounding weird thus suspicious. Yes MP3s can be much smaller than CD tracks but don't forget the aim was to have ordinary CDs, still playable in normal players.
With that said, even on the most paranoid settings, 80 MB is a lot of data if you want to compromise someone...
Genius.
CDs. I think he just collects pictures and text about the people he hacks, maybe some videos if they're relevant or important. ~600 MBs are fairly enough for that if the videos are low quality encoded or compressed somehow. He uses a software that really exists. It is called DeepSound and you can find it here http://jpinsoft.net/deepsound
Is one of those things you only realize if you take a deep look at the details and actually search about the software shown on the scenes where he burns the CD's. The software is called DeepSound and you can find all about it here: http://jpinsoft.net/deepsound
Did he try to? As far as I can recall he was just trying to pick a good one when Elliot stopped him. Also, the software he used (DeepSound) definitely creates playable audio CDs.
The problem with using actual music CDs is that it doesn't leave much room for his own data. DeepSound's low quality option only gives him about 350MB or so to use. (And what happens if someone asks to borrow a CD?)
There's really no reason why he couldn't have used an encrypted hard drive. He would also have plausible deniability if he was coerced into giving up the password to decrypt it.
It's much cooler for him to have a "collection" like Dexter though.