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I'm investigating device encryption for my Android, but what is the impact on internal storage and external SD?

Also, if the device is used as a flash drive or livedisk (DriveDroid), will I run into an issue accessing storage from another connected device?

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It depends on the device, the version of Android and the supported features. Earlier devices and versions of Android only supported encrypting the internal storage, but more recent devices and versions support encryption of external SD cards as well.

It is my understanding that as long as the device is unlocked, it can still be used as a USB drive since the service is provided by the OS itself, but that may also vary by manufacturer as some devices don't use the same USB drivers.

For specific details of what exactly is supported, you'd need to research a particular device and software version.

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