Typically a covert channel is parasitic to its host channel; it reduces bandwidth of the host channel by reducing the signal-to-noise ratio in the host channel.
Observers are unaware that a covert message is being communicated. Only the sender and recipient of the message notice it. For example, in steganography hidden messages are encoded within pictures or other data in such a way that the picture does not appear to be altered. To an outside observer the picture would appear innocuous, but the recipient is able to extract the message from within the image.
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