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php source encryption effectiveness and disadvantages using -'php,security,encryption,obfuscation'

php source encryption effectiveness and disadvantages  using -'php,security,encryption,obfuscation'

I have some PHP source code that I'm hosting with hosting company XYZ. I'm using a PHP encryption software like Zend Guard or ionCube to protect the source from being viewed by anyone (sysadmin or hacker that hacks the sysadmin).

How easy/hard is it for someone who has full access to the system (like the sysadmin or hacker that hacks the sysadmin) to decrypt the source? I don't know how encryption software work, but I'm assuming they use some key, which would have to stay on the server and is therefore accessible to a sysadmin or a hacker. If you're technically-knowledgeable about the how-to, don't hesitate to offer an explanation in your answer.
Does the use of such source encryption slow down the site? If anyone has first-hand experience or knows from someone that has first-hand experience ;)

I'm interested in the technical aspects of this, how effective encryption is.. and its disadvantages, from those who used them or considered using them

Thanks (all helpful answers/comments are up voted)

Edit: the answers so far seem to be ignoring what I'm trying to understand.. I'm trying to understand the effectiveness of encryption. I don't really have any code that needs protection from the bad guys, the above was just an example, so advice like open source it or hire a lawyer don't really address my technical curiosity.. A+ to anyone who gets the point

asked Sep 7, 2015 by rajesh
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