The encryption key can be found in the Install Tool (section “Basic Configuration” and “All Configuration”). This string, usually a hexadecimal hash value of 96 characters, is used as the “salt” for various kinds of encryption, CRC checksums and validations (e.g. for the “cHash”). Therefore, a change of this value invalidates temporary information, cache content, etc. and you should clear all caches after you changed this value in order to force the rebuild of this data with the new encryption key.
Keep in mind that this string is security-related and you should keep it in a safe place.