This presentation tries to show different security problems that might arise in virtualized environments. It first talks about virtualization based rootkits (AKA “blue pills”) — what so special about them, clarifies some misunderstandings and also discusses how real this threat is today. It also touches on the subject of virtual machine isolation and why we should aim towards thin hardware-based hypervisors. Nested virtualization and its impact on security of virtualized systems is also discussed.