Encryption at rest means the data stored on your servers is kept in encrypted form while it sits on disk. If someone walks off with the physical drive, copies a database file, or grabs a backup, what they get is unreadable scramble rather than a clean list of names and passwords. The key needed to open it is held separately.
A good comparison is a safe in an office. Documents left on a desk can be read by anyone who walks past, but the same documents locked in a safe are useless to a thief without the combination. Encryption at rest is that safe for your stored data. It pairs naturally with encryption in transit, which protects data while it moves, and together they cover both halves of the journey. It is not the same as hashing, which is one-way and used for passwords.
The part people get wrong is scope. The main database might be encrypted while the nightly backup, the log files, or a secondary storage bucket are not, and that is exactly where a data breach tends to start. Real protection covers every copy. Think of the laptop a developer left on a train, with a database export sitting in a downloads folder. If that file was encrypted at rest, the loss is a hardware cost. If it was not, it is a reportable incident.
At TopDevs we enable encryption at rest across databases, backups and file storage as a baseline, and keep the encryption keys managed separately, so a lost disk or leaked file does not become a readable list of your customers’ data.