At first glance, this statement seems to be a paradox. Peter says that if you suffer for righteousness sake, you are blessed and you are not to be afraid of those who terrify you. Huh?
Human understanding says that if you are suffering you definitely are not blessed and our natural response to those who terrify us is fear. All of this is true when we live and walk according to the flesh. However as Christians we are not to live and walk according to the flesh. We are to live and walk according to the Spirit.
When we live and walk according to the Spirit, something rather amazing takes place. Though physically we may be subjected to sorrow, suffering, challenges, pain and death these things do not have dominion over us spiritually. We are not victims of our circumstances; we are victors over them through Jesus Christ our Lord.
Paul summarized it well when he wrote these words:
We are pressed on every side by troubles, but we are not crushed. We are perplexed, but not driven to despair. 9 We are hunted down, but never abandoned by God. We get knocked down, but we are not destroyed. Through suffering, our bodies continue to share in the death of Jesus so that the life of Jesus may also be seen in our bodies.
2 Corinthians 4:8-10 (NLT)
We must never forget this. We are blessed!