* Most security experts who’ve looked at Mega’s code and methodology are saying either ‘You gotta be kidding me’ or ‘WTF?’. I’m not a crypto geek, so let me just summarize Ars Technica’s deep dive into the Mega’s encryption scheme: “Megabad.”
* When Dotcom talks about Mega as a “privacy” service, he’s not talking about your privacy, he’s talking about his.
MegaUpload got in trouble because it allegedly stored thousands of pirated movies. It was so good at it that clever users developed their own movie piracy businesses using MegaUpload as their service provider. In June 2010 the FBI raided a five-person startup called NinjaVideo that was doing just that.
Dotcom claims that when Hollywood came knocking with Digital Millennium Copyright Act complaints, he complied with their takedown requests. But apparently not often enough to keep the feds from raiding his home and taking MegaUpload down for the count.
With Mega’s encryption scheme, Dotcom claims that he will have no way of knowing whether content uploaded to his servers infringes someone’s copyright. This is the Sergeant Schultz defense, for you Hogan's Heroes fans out there: He sees nothingk, he knows nothingk, he does nothingk.
At the same time, though, Mega gives you several ways to share files, either by emailing a link to a file or folder to other Mega users, or simply posting the encrypted URL, which anyone can access with a click. So sharing copyrighted material is bit more work than with MegaUpload or a Bit Torrent site, but not much. Mega also stores your IP address and will comply with any warrants or takedown notices it receives if someone accuses you of sharing copyright content. It even offers copyright holders a form they can fill out to lodge DMCA infringement claims.