Encryption and Privacy: Goodbye Copyright Laws

Kim Dotcom really is his name these days. He had it legally changed.

The federal government shut down his enormously profitable file-sharing business in 2011. It won’t shut down his latest version of file-sharing.

His new company, Mega, offers 100% encryption. His company can’t crack it. The U.S. government can’t crack it – not at a price it can afford, anyway.

So people can post movies, songs, or anything else on his site. You get 50 megabytes of free storage to start out.

His lawyers can now say this: “Our company will cooperate with the governments of the world. But, sorry, we have no idea what people are putting into their accounts.”

The federal government opened a gigantic can of worms when it did Hollywood’s bidding and shut him down. It made him mad. He decided to get revenge.

The federal government can track some kinds of digits. It cannot track all of them.

As people seek privacy, hackers like Dotcom will sell it to a few major players, and give it away for free to everyone else.

The days of easy tracking of data are coming to an end. People who don’t really care to defend their privacy will remain vulnerable to government intrusion. Those who decide they will no longer remain sitting ducks will not have to.

There is a new generation of haves and have-nots coming into existence: those who have privacy and those who do not.

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Inside Mega: The Second Coming Of Kim Dotcom

Kim Dotcom, a.k.a. Kim Tim Jim Vestor, a.k.a. Kim Schmitz, doesn’t act much like a man with a net worth in the negative.

At 11 a.m. on a Tuesday he’s driving me around on a golf cart “safari” of his 60-acre estate outside of Auckland, New Zealand. He weaves among a grove of olive trees with alarming speed–he’s removed the speed regulator in his fleet of electric buggies, and they can clock up to 19 miles per hour. We swing past his 2,000-bottle-a-year vineyard and barrel down a hill toward his $30 million mansion, complete with a hedge maze, a five-flatscreen Xbox room and a 75-foot cascading water display.

Given that he owes millions of dollars to defense lawyers and now has to raise his five children on a $20,000-a-month government allowance meted out from his frozen bank accounts, wouldn’t it be wise to live a slightly simpler life?

“No way,” he says, leaning his massive 6-foot-7, 300-plus-pound body onto the cart’s steering wheel. “That would be allowing them to get away with this stunt. I won’t accept that. By staying here I’m saying, ‘Eff you! You can’t defeat me!’”

The “stunt” Dotcom refers to is the police helicopter raid on his compound that made global headlines 15 months ago, timed to coincide with the U.S. indictment that shut down his ultrapopular constellation of Mega-branded websites under charges of hosting half a billion dollars’ worth of pirated movies and music. Overnight Dotcom went from an underground entrepreneur to one of the most public and controversial figures on the Internet. His site domains, including the flagship, are now the property of the U.S. government. His servers have been ripped out of data centers around the world and sit in evidence warehouses. He’s had to let go of 44 of his 52 house staff as well as Megaupload’s hundreds of employees. All but 2 of his 18 cars have been seized or sold.

But today Kim Dotcom is putting all of that in his souped-up golf cart’s rearview mirror. His new storage startup, called simply Mega, launched Jan. 20, defiantly a year to the day after the sudden destruction of Megaupload. It’s already exploded to exceed 3 million registered users. His engineers tell me it’s moving 52 gigabits of data per second–that’s nearly half the entire bandwidth of New Zealand–and growing at 30% a week. The traffic has been driven in part by Dotcom’s own larger-than-life persona: an Internet mogul who doubles as either an intellectual-property-stealing supervillain or an oppressed freedom fighter, depending on whom you ask.

Either way, Dotcom has learned from his legal misadventures and promises that the copyright cabal will find this company much harder to snuff. Mega is “the Privacy Company.” Unlike Megaupload, everything sent to Mega is encrypted. No one can decrypt those scrambled files except the user–not the FBI, not the Motion Picture Association of America, not even Kim Dotcom. Mega claims to keep the eyes of both authorities and snoops off its users’ files, a libertarian ideal that fits neatly into Dotcom’s personal narrative as a victim of the U.S. government’s overreach into the digital world. “Mega is not just a company,” he says. “It’s a mission to encrypt the Internet. We want to give the power back to the user.”

The revenge Dotcom is planning, he says, will be twofold: Not only will his new, better company be immune from his enemies, but he has also hired a team of 28 global lawyers who he believes will make the U.S. government pay for treating the Internet as a subjugated colony.

He powers his golf cart up a steep hill to a peak overlooking his estate, with life-size giraffe sculptures in the distance and MEGA spelled out in 15-foot-tall white letters laid out next to his winding driveway.

“This is a low point,” Dotcom says quietly. But his sulking doesn’t last long. “I’m going to be bigger than ever.”

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