Disk encryption

In transit protects the path: TLS on the wire. At rest protects the store: FileVault, BitLocker, or LUKS on the disk. Full-disk encryption is stolen-laptop protection. When the machine is on and unlocked, the OS sees cleartext. On a virtual machine the hypervisor can often unwrap the guest disk. Application-level encryption is the next layer when the threat is the platform, not the bag.

First principles

Encryption in transit protects a path: TLS, SSH, a VPN. Encryption at rest protects a store: a disk, an object, a database file. They answer different thefts. A packet sniffer on the path does not get a TLS session. A thief with the laptop in a bag does not get a FileVault volume. Mixing the two sentences up is how people 'encrypt' a disk and then serve the files in clear over HTTP.

When the machine is off (or the volume is locked), the thief has a brick. That is the design. It is stolen-laptop protection, not protection from malware that is already running as you.

Who can unwrap the key

On a laptop, the key is wrapped by the user's credential and usually a TPM. On a virtual machine, the hypervisor often holds a key that can unwrap the guest disk: snapshots, live migration, backup agents. That is still useful against the stolen-hosting-drive story. It is not useful against the hypervisor admin. Application-level encryption — the app wraps the data with a key the hypervisor does not have — is the next layer when the threat is the platform, not the bag.

What an admin actually does

• Turn on FileVault, BitLocker, or LUKS for every portable and every workstation that leaves a desk. Escrow recovery keys in a vault, not in a spreadsheet.
• Servers: encrypt volumes if the threat includes stolen disks or recycled hardware. Know whether the hypervisor can unwrap them.
• Do not confuse full-disk with 'the database is encrypted'. If the app can read it, so can anyone the app will talk to.
• In transit still needs TLS. Disk encryption does not cover the wire.