About this interactive
Encryption turns plaintext into ciphertext that only the key turns back. The Encrypting Data lesson says its main cost is performance: encoding and decoding take work, so security has to be balanced against speed.
At rest, you choose the scale. On a disk: the whole disk, a partition or volume, a file, or the block level. In a database: the whole database, one table, or just one column, such as the address field for every user. A larger scale protects more but can cost more performance (unless hardware does the work). So when everything on a device needs protecting, as on a laptop that could be stolen, encrypt the whole disk. When one file or one column is sensitive and the rest is busy or harmless, encrypt just that.
In transit, data is encrypted as it travels, such as a login form sent to a server.
In use, the data stays encrypted until the moment it is processed: decrypted on the processor, worked on, encrypted again. The lesson's example is a shared cloud server, where another tenant might find a way to look into memory.
A quick test for each card: is the data stored, moving or being processed, and if stored, how much of it is sensitive?
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