Firefox Sync takes the security of your data very seriously. All of your data is stored in a way that only you can read.

When you configure Firefox Sync, a Sync KeyRecovery Key is generated. You can think of this key as a digital version of a real-life key you use to open doors or safes.

When you send data to a Sync server, Sync creates a digital safe on your computer, puts your data in that safe and then uses the Sync KeyRecovery Key to lock it. The digital safe is then transferred to and stored on the Sync Server.

Your Sync KeyRecovery Key is the only key in the universe that can open this digital safe and there is no other way to crack the safe. If someone accesses your Sync data on the Sync server, they only see your digital safe not what's inside. The Sync KeyRecovery Key is generated in a way that it would take thousands of computers, all working together, many years to duplicate your key and unlock your safe and the data inside.

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A Sync KeyRecovery Key is a cryptographically secure, randomly-generated key. It is generated by the Sync client when you initially configure Sync. The Sync KeyRecovery Key is used to encrypt data before being sent to the server.

The Sync KeyRecovery Key is never transmitted to the Sync Server, so neither the server nor the people with access to it know how to decrypt your stored data.

More technical information is available.