As described above, creating a storage pool during cluster creation with either WAC or PowerShell defines a set of addressable read/write sectors without fault protection. Volume creation using the space in the pool is the first opportunity for administrators to address the trade-offs between space efficiency and data protection. The options are based on the concepts of either "mirroring" or "parity." The latter is sometimes called "erasure coding."

Mirroring uses multiple copies of all data by stripping file sectors across disks and servers. In two-way mirroring, the two copies of a file sector are written to different physical hardware (different drives in different servers) that are presumed to be unlikely to fail together. This protection method prevents data loss in the event of a single drive or single-server failure. Microsoft recommends three-way clustering for clusters with more than two nodes when using mirroring.

Three-way mirroring requires at least three servers to define three independent hardware fault domains. Because there are three fault domains, the system can tolerate at least two simultaneous hardware problems (drive or server). For example, during the reboot of one server, if another drive or server fails, all data remains safe and continuously accessible. Since three-way mirroring writes three copies of everything, its storage efficiency is 33.3 percent. Writing 1 TB of data will use at least 3 TB of physical storage pool capacity.

Parity encoding, often called a form of erasure coding, is a technique for achieving fault tolerance in data storage and transmission. It leverages bitwise arithmetic, specifically XOR (exclusive OR) operations, to create parity data. Parity encoding is an effective method for ensuring data integrity and fault tolerance in storage systems. It is a relatively simple yet powerful technique to create redundancy, allowing for data recovery in the case of partial data loss.

Volumes can be protected through a combination of mirroring and parity. Writes are first placed in the mirrored portion of the storage and then are gradually moved into the parity portion in the background. The advantage of the approach is that the system uses mirroring to accelerate erasure coding. You need at least four servers to use three-way mirroring with dual parity. The storage efficiency of mirror-accelerated parity depends on the proportions that you choose. It will, however, be better than using all mirroring and less than with all parity.