In this paper, we clarify what steganography is and what it can do. We contrast it with the related disciplines of cryptography and traffic security, present a unified terminology agreed at the first international workshop on the subject, and outline a number of approaches-many of them developed to hide encrypted copyright marks or serial numbers in digital audio or video. We then present a number of attacks, some new, on such information hiding schemes. This leads to a discussion of the formidable obstacles that lie in the way of a general theory of information hiding systems (in the sense that Shannon gave us a general theory of secrecy systems). However, theoretical considerations lead to ideas of practical value, such as the use of parity checks to amplify covertness and provide public key steganography. Finally, we show that public key information hiding systems exist, and are not necessarily constrained to the case where the warden is passive.