Soulja, I'm not sure how your making your online games, but if you plan it well it can be really efficient anyway. For example, obviously all the play is on one frame (i suppose with global event sheets this could be different in Construct), I have all my "players" as one object. You then only really need to apply the tracking to one object. Theres no need for you to need to track loads of objects. Its tempting to open source(ify) an old version of Eden to show how i did it
Also, yes, player info should NEVER be held at clientside. It then really comes down to how secure your server is. If it was "unhackable" you could just store all player info in an unencrypted ini file and it wouldn't really matter.
I'm really just ranting, but i think what im trying to say is that the fundementals of online game creation are far more important than how well we can encrypt - It all comes down to planning and a clever system.
Hope i didn't sound rude or anything! Im basically just thinking out loud