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It does work, if you read up on how the encryption works, you'll see it's sound.

I don't know how secure mega is, but deduplicating encrypted data is possible.

Bitcasa does it as well.

but then 'duplication" only happens if the source file is shared post-encryption, which is far less common than sharing pre-encryption, sync post-encryption sharing requires sharing the key as well.

You should read about convergent encryption. You can deduplicate plaintext files without knowing what they are.

They don't use convergent encryption, they randomly generated keys when files are uploaded. The only deduplication that exists is when you copy a file that's been shared with you by another user, because in this particular case you also copy the key.

"Secure" isn't boolean. Although convergent encryption will prevent people from accessing your secret data, it does have different security properties: Mega would be able to determine whether you have a particular file, which they cannot with the current system.

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