How big can a password protected sparse image be ?

I'd like to make a sparse image fit on a 3tB external USB 2.0 WD drive (I haven't bought it yet), can I make
one that's as big as 3tB ? (or close to it ?).
I'm backing up a drive with lots of information on it and it's going to stay at work as an
offsite backup..
Or is there a good way to PW protect such a big drive ?

With a single sparse image (not FV, which uses bands, but still quite risky) it's an all your eggs in one basket thing. Especially with a sparse image that large, if there's any file contamination, the whole thing goes bad and you lose it all. As Linc said, "as long as it's not your only backup." I woudn't trust it. Not only that, but the technology of a 3TB drive, itself, may not be that stable. You are looking at two layers of potential instability.

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