Zero Day refers to a vulnerability in a system or software that was not previously known until after it was successfully hacked (either by a nefarious or ethical hacker). The term originated from the notion that the security community had zero days of knowledge about the vulnerability before it was exploited. This contrasts to other vulnerabilities where the security community is aware of the issue and has responded by making a patch available. Zero day exploits are far less common than exploits of known vulnerabilities, but can be especially damaging.
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