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On the surface, encryption > no encryption. However, BitTorrent's encryption is rather useless and more akin to obfuscation; it's not very secure. It also seems to fail at obfuscation:
Analysis of the BitTorrent protocol encryption (a.k.a. MSE) has shown that statistical measurements of packet sizes and packet directions of the first 100 packets in a TCP session can be used to identify the obfuscated protocol with over 96% accuracy.
It would seem that encryption would be a "feel good" feature, without practical use.
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