Kim Dotcom's New MEGA Encrypted Cloud Storage: See No Evil, Store No Evil - Forbes

Controversial file storage tycoon, Kim Dotcom, is launching his new encrypted cloud storage site MEGA in the U.S. tomorrow (note: link not currently active.) The service will offer 50GB of storage for free and three Pro tiers of 500GB to 4TB for $13-$40 a month.

The new service comes a year to the day from when authorities raided Dotcom’s New Zealand mansion and shut down his previous site, Megaupload. That site was notorious as a haven for pirated materials, but Dotcom maintained his innocence and charges against him were dropped.

Dotcom is clever and MEGA is designed both to compete with cloud storage giants like Dropbox, Google Drive, and RapidShare—and also to insulate itself from future charges. The difference that makes a difference is that all files are encrypted using a 2048-bit RSA key. (See a detailed writeup on Ars Technica for more details.) What this means effectively is that Dotcom cannot be accused of knowingly storing copyrighted materials because he cannot technically know the content of the files stored on MEGA—only the user who uploaded the files and/or possesses the key can.

As you can see in the screen shot below (from the Ars Technica article), you can provide links to your files (either containing the key so someone can access them directly or by providing them with the key separately) but you are prompted with a caution about not transmitting the keys through insecure channels and a far-reaching copyright warning. Although users typically do not read these warnings and will undoubtably use the service to store unauthorized copyright material, they cannot be said to have not been warned. Dotcom is betting that the combination of encrypted content and explicit warnings should be enough to keep his new service out of trouble.

In an exclusive interview this morning in the Guardian (UK), Dotcom tells reporter Toby Manhire, ”We want to show the world that we are innovators. We want to show the world that cloud storage has a right to exist. And, of course, when you launch something like this, you can expect some controversy. The content industry is going to react really emotionally about this. The US government will probably try and destroy the new business … you’ve got to stand up against that, and fight that, and I’m doing that … I will not allow them to chill me.”

He maintains in the interview that the case against Megaupload was politically motivated in response to the failure of the SOPA legislation in Washington. The process has made him change his perceptions of America. In his early days as a hacker, he says that he “thought of [himself] as more American than Americans… I always had this attitude of can-do, and if you’re successful you can show it, which is a very un-German thing.” But after his prosecution he claims, “ a much better understanding now of how the US government operates and how much spying is actually going on, how much privacy intrusion is the reality today … we are very close to George Orwell’s vision becoming a reality.”

As for the entertainment industries approach to controlling piracy, Dotcom thinks they’re missing the boat. ”There’s so much money to be made, and those fools don’t get it,” he says. “They just don’t get it.” He sees himself as both pro-freedom and pro-business. It’s just that the business he sees is different than, and disruptive of, the Hollywood model. One of the perplexing things about Dotcom is that it’s as easy to paint him as a rogue as a revolutionary.

Dotcom does not accept the hacker’s black hat, however. ”I’m not evil, you know? I’m a good guy,” he says. “Everyone who knows me likes me … they should really come to the table, come to their senses and work this out. Because I’m not going to cave in. I’m going to fight this thing. And there’s no way in hell that they have any chance to win this. I don’t see it. I don’t see it because I know I’m innocent, and the lawyers know I’m innocent, and we have right on our side.”

The questions for MEGA are multiple. Will Dotcom be able to dodge takedown attempts? Will users find the encryption scheme too cumbersome? Will MEGA disrupt not only the entertainment industry but also the cloud storage market? Whatever happens, like the name and Dotcom’s own person suggest, it’s going to be big.

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