After Installation, the owncloud user must generate his own private key. This can be done in the Settings -> Security
After generation you can copy or download the private key to a secure location. To have a backup of the private key is recommended. In case the System crashes or the user will be deleted accidently you can not read the shared files anymore. The private key is NEVER sent to the server.
A user can have multiple private keys assigned to his account i.e. for multiple devices. Files uploaded into one os his encrpyted folders will automatically be encrypted for ALL his private keys.
The current status does not allow automatic re-encrypting. If files have been uploaded BEFORE a public key is added to the folder, the files will not be re-encrpyted.
Once the private key is generated and the public key is uploaded, a user can create encrypted folders.