Data rot or data degradation is a problem related to storage media. Over a period of time storage media gradually decays and some of the data is lost or altered partially even if the data container is not lost.
To understand the problem more clearly in simplified terms, let’s say a file means an area of the disk where the file information is stored. In case of data rot all the information is not lost immediately (which happens in case of a severe disk corruption) but bits randomly get flipped at a very slow rate (even over years). In case of hard disks, the reason is that data is stored as electrical charges, which can leak very slowly due to insulation issues. The chip itself may not be damaged and may work fine if re-programmed but the data is not intact.
Some examples of data rot can be the image that lost some pixels or the audio file which sounds choppy after you saved it on the disk for a while. Or may be the video file that played perfectly before but is showing some colored rectangles in some frames off late. It can happen as quickly as within a few months to a decade depending on the quality of the storage hardware.
Data rot cannot be avoided through incremental backups because once it happens you can only backup the rotten copy. RAID can protect you. But regular users rarely use RAID.
Few of the most advanced filesystems do take care of this using integrity checking and self-repairing algorithms – btrfs and ReFS. Btrfs is from Linux and can be used on desktops as a general purpose filesystem. ReFS, on the other hand, is applicable to Windows Server platforms. A older filesystem (still in use) with such capabilities is ZFS.