Cryptography can be used two ways: For digital signature and for secrecy.
For both purposes, two digital number codes are used: One code that you
keep hidden from everybody (called the private key), and one which can
be published to everybody (called the public key). The two keys are
constructed in such a way that if you use one of them for encryption, it is only
possible to decrypt with the other key - and vice versa.
This implies that if a locked message only can be unlocked with the public key, then the message can only have been locked with the senders private key. And as the sender is the only one in possesion of the private key, he is the only possible sender.
Alternatively, you can use another standard, called GnuPG (GNU Privacy Guard). There is a lot of free software that supports it, but in most cases, you will have to install a plug-in in your mail reader to use it. The basic technology is the same in the two standards.
In order for it to work, the most basic condition is that you must be absolutely sure that you alone know and have access to your private key. What could happen if somebody (i.e. an intruder) copied your private key and signed an instrument of debt with it? Will you then be in a better or worse position compared with a forged signature on paper?
Cryptography can also be used to prevent unauthorized persons
getting access to private information. For example you can make
sure that private documents can not be read by the thief who stole your
laptop. But what happens if tax authoroties accuse you for cheating and
beleive that the proof is on your computer? Can they demand for you
to give them your private key? What happens if you do not deliver
this private key?
The digital signature and cryptography can have several good uses and will be a part of the digital society of the future. But it is of utmost importance that everyone involved know how to handle it. We all have a lot of experience with hand-written signatures and door locks, and the juridical system have lots of precedence in court on these matters. The digital versions, however, work differently, and very little has shown up in court yet.
Therefore it is important that we are cautious and do it right. Both legally, technologically and educationally.
Under Linux you can use LUKS for the encryption of disk partitions. LUKS is even able to make a "Full Disk Encryption". That implies that the whole disk, except the Linux kernel and maybe some drivers, will be encrypted. In this way you are sure not to leave any tracks or confidential information in unencrypted files. If you do not want to encrypt all your data, Linux also offers "encfs" which allows you to encrypt single directories.