How do you use cloud computing? And what precautions do you take to keep your information secure?

Over the weekend, an authentication bug made Dropbox accounts accessible via any password. Because encryption and decryption happen on their servers and not yours, they hold the encryption key. This gives you access to your files even if you lose your password. In this case, it also gave hackers access to your files.

Dropbox reports that only a small number–about 1%–of accounts may have been accessed, and they’ve contacted the owners of those accounts. But it raises the question: how safe is the cloud?

Of course, nothing is foolproof. But there are some things to keep in mind. Namely, these kinds of services can be great for file sharing and transfer. The question is, what files are you sharing and transferring? Take a hard look at what kind of information you put there, and think about your real comfort level.

Photo by zebble, via Flickr.