As of rsync-2.5.6, the --link-dest option is now standard! That can be used instead of the separate cp -al and rsync stages, and it eliminates the ownerships/permissions bug. I now recommend using it. Also, I'm proud to report this article is mentioned in Linux Server Hacks, a new (and very good, in my opinion) O'Reilly book by compiled by Rob Flickenger.
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Easy Automated Snapshot-Style Backups with Linux and Rsync
This document describes a method for generating automatic rotating "snapshot"-style backups on a Unix-based system, with specific examples drawn from the author's GNU/Linux experience. Snapshot backups are a feature of some high-end industrial file servers; they create the illusion of multiple, full backups per day without the space or processing overhead. All of the snapshots are read-only, and are accessible directly by users as special system directories. It is often possible to store several hours, days, and even weeks' worth of snapshots with slightly more than 2x storage. This method, while not as space-efficient as some of the proprietary technologies (which, using special copy-on-write filesystems, can operate on slightly more than 1x storage), makes use of only standard file utilities and the common rsync program, which is installed by default on most Linux distributions. Properly configured, the method can also protect against hard disk failure, root compromises, or even back up a network of heterogeneous desktops automatically.
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