Everything is encrypted by default, however, the key they generate is tied to your account and files can be recovered via password reset, for instance.
Entering your own key is far safer... but if you lose the key you will be SOL.
The one downside with backblaze is they require you to enter your key server-side to view/restore your files... which sucks... but it is by design.
Overall, despite being incredibly paranoid I haven't seen any reason to distrust them. They are byfar one of the more transparent storage companies out there... all that said if I store anything super private (tax docs, for instance) they always go into an encrypted container of sorts (7zip, etc) prior to backup.
