An improved, I think, version:
Destination:
$ nc -l -p 10002 | pv | gpg -d --no-symkey-cache | tar -x
Source:
$ tar -cv [folder] | gpg -c | nc [dest's hostname] 10002
The `tar` `-v` flag is moved to the source host, so that you can see `gpg -d`'s output better to check that it isn't decrypting bogus publickey-encrypted data.
This uses the `pv` command too, which is optional in the pipeline and is usually not installed. It behaves similar to `cat` but with a handy progress indicator.