- Each layer between a block to be read or written and the read or write adds both complexity and a possibility for an error.
- RAID and/or encryption/decryption both add to this complexity. It does not matter if you are using software or hardware implementations of these.
- An error will most commonly occur through human error. The more complexity, the greater the risk of human error.
- Less commonly, an error/failure will occur through software error. The same relative level of risk is involved if this is "software RAID / software encryption" or if these are "hardware" implementations. The only difference is where the software is executed.
- There will always be hardware failures with storage devices; which is why manfuacturers publish MTBF and related specifications.
Depending on the types of errors that occur, and errors will occur -- human, software, or hardware -- the risk of data loss is of critical concern. Every layer of complexity increases the risk of data loss. The prudent storage infrastructure architect will endeavor to mitigate these risks.
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I spent several decades in IT infrastructure consulting, sales, marketing and management, specializing in data storage infrastructures . For whatever that may be worth.