The correct attribute name is 'format', not 'type'.
https://bugzilla.redhat.com/show_bug.cgi?id=
1139910
</p>
<h3><a name="StorageEncryptionDefault">"default" format</a></h3>
<p>
- <code><encryption type="default"/></code> can be specified only
+ <code><encryption format="default"/></code> can be specified only
when creating a volume. If the volume is successfully created, the
encryption formats, parameters and secrets will be auto-generated by
libvirt and the attached <code>encryption</code> tag will be updated.