There’s an ugly truth to being part of the online kingdom – the risk of identity theft. Although no formal study has ever indicated that P2P networking is inherently more dangerous than other forms of Internet computing, its widespread use has placed security concerns at the forefront of the many issues involving P2P.

For years, the Internet community has been warned that P2P programs could make the user susceptible to identity theft. Many articles have been written about Japanese file-sharers who’ve accidentally exposed sensitive military documents. Additionally, net users are constantly being warned that bank documents, tax information, and other sensitive documents can potentially be indexed for the entire file-sharing world to see.

There’s little doubt the threat of identity theft continues to plague the online world – and has become highly focused on P2P. Yet this serious security threat is also the easiest to avoid. This threat to the security of the end user occurs for one reason, and one reason alone.

When people install their favorite P2P program, whether it’s Morpheus, Kazaa, BearShare, Azureus, or WinMX, the installation process creates an empty shared sub-folder within the install folder. In other words, let’s assume the end user installs uTorrent on Windows XP. The program installs to the following: C:\Program Files\uTorrent. Now, it also creates a sub-folder for shared files, which is located at C:\Program Files\uTorrent\shared.

Inside of this “shared” folder is absolutely nothing. There are no music files, no movie files, and no sensitive tax/financial documents. The end user might have bank account information on his or her computer – complete with online passwords and withdrawal information on a Word document. Some clients such as LimeWire force the end user to manually pick the shared folder. Providing that document is not placed in the “shared” folder, it is metaphysically impossible for the document to be shared on any P2P network.

So how does a tax return document become indexed on, for example, the Gnutella network?

It’s very simple. The end user needs to physically change the empty shared folder that is already established by default. A more computer savvy individual picks a specific folder that contains only non-sensitive information. Unfortunately, not every Internet user is knowledgeable on security, and inadvertently shares the entire hard drive. Quite simply, the end user changes the shared folder to “C:\”. Now the entire hard drive is shared.