In order to make its users feel safe from NSA tracking, Google has started server side encryption of its Cloud Storage Data as according to the blog post on the Google's official Cloud Platform Blog.
Currently we don't know whether it will fix the issue of NSA scanning or not as users want proof of what's happening behind the walls. To be clear: encryption is definitely a good thing, and it can help guard against information getting out if a server is hacked or otherwise compromised. Here's how encryption works:
Each Cloud Storage object's data and metadata is encrypted under the 128-bit Advanced Encryption Standard (AES-128), and each encryption key is itself encrypted with a regularly rotated set of master keys. Of course, if you prefer to manage your own keys then you can still encrypt data yourself prior to writing it to Cloud Storage.
However, while that encryption will make the data held in Google's cloud more secure from attack, the keys will still be held by Google. So anything can happen and even Google has stated that if Google forced by law to hand over those keys then the encryption becomes irrelevant.