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A Trojan Horse is a seemingly benign program or application which, unknown to the user, contains malicious code.
A Trojan horse refers to anything you accept that initially appears to be harmless, but later proves to be extremely destructive.
The term itself comes from Homer's Iliad. At the end of the Trojan War, the Greeks left a large wooden horse near the beaches of Troy. During the night, Trojan soldiers brought the enormous horse into the city. Once inside, Greek warriors emerged from the horse and overran the city of Troy.
A Trojan What!?
As it relates to malware, a Trojan horse is defined as "an apparently useful and innocent program containing additional hidden code which allows the unauthorized collection, exploitation, falsification, or destruction of data."
For example, you might download and install what appears to be a harmless freeware game, but when you run the program, it unleashes a payload that could erase your disk, install a keystroke logger, or let a remote hacker gain access to your computer. Once they have control, a hacker may steal your identity or use your system to commit illegal denial of service attacks.
When downloading or installing new software, be sure to practice due diligence. Thoroughly research any product or application before you install it. Software applications that install Trojan horses can quickly earn a negative reputation on the Internet. A quick Google search will often help you discover these programs.
Furthermore, pirated software often includes Trojan horse software.