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Storing the key used to encrypt backups on the server used to create the backups is not ideal. It's impossible to tell when it's been stolen, and stealing the key once would provide access to all past and future backup data.
Instead it would be nice if a new symmetric key was somehow for each archive, and then encrypted using the public key. That way the private key could be kept safely offline until a restore was required.
Duplicity does something similar in using gpg to protect the files.
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