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 |  Subject: Kim Dotcom’s Mega is dropped by PayPal over end-to-end encryption, may adopt Bitcoin instead  Fri Feb 27, 2015 6:46 pm | |
| Mega, the end-to-end encrypted cloud storage platform founded by mercurial entrepreneur and occasional outlaw Kim Dotcom, is back in the news. This time, the company’s primary adversary is PayPal, which earlier this week cancelled its payments processing contract. In a blog post on the news, Mega writes:
- Quote :
- Eventually PayPal made a non-negotiable decision to immediately terminate services to MEGA. PayPal has apologised for this situation and confirmed that MEGA management are upstanding and acting in good faith. PayPal acknowledged that the business is legitimate, but advised that a key concern was that MEGA has a unique model with its end-to-end encryption which leads to “unknowability of what is on the platform”.
Dotcom claims that the real driving force behind this decision was pressure placed on PayPal by Visa and Mastercard who, in turn, he says were doing the bidding of Vermont Senator Leahy and his pals in the US music and film industries. Mega points to a report on “shadowy” financial hosting sites published by NetNames and funded in part by Digital Citizens Alliance, which counts the Motion Picture Association of America (MPAA) as a financial backer.
A statement from a PayPal spokesperson reads:
- Quote :
- PayPal can confirm that we have decided to end our relationship with Mega for business reasons. We respect the privacy of all our customers and former customers and will not provide further details about this decision.
Mega’s founder has been embroiled in an ongoing fight with US authorities over copyright infringement accusations stemming from his previous file upload site, MegaUpload. Since its launch in 2013, Mega claims that it has grown to host more than 4 million (mostly sub-20MB) files and that it has more than 15 million registered users across over 200 countries. The company notes in its blog post that it received 9,052 file takedown requests in Q4 2014, representing 0.011 percent of its total file count.
The Mega blog post argues that the company has “demonstrated that it is as compliant with its legal obligations as USA cloud storage services operated by Google, Microsoft, Apple, Dropbox, Box, Spideroak etc, but PayPal has advised that MEGA’s ‘unique encryption model’ presents an insurmountable difficulty.” In other words, the issue for PayPal and others is that Mega itself can’t see what files its users are storing, and thus cannot take any proactive measures to take down infringing or otherwise illegal content (such as copyrighted works or child pornography).
As a consummate showman, Dotcom will likely view this latest action by “the man” as a positive development in the “any press is good press” sense. At the very least, the supposed reasoning behind the decision – that Mega’s strong encryption is too opaque – reinforces one of the platform’s primary value propositions and further distinguishes it from the other file storage solutions in the market.
Mega has promised to extend existing subscriptions for two months, free of charge, while also ceasing to enforce storage limits and avoiding suspending accounts for non-payment for a period of two months while its new payment system is implemented.
Given that Mega and Dotcom are beginning to look like personae non grata within the traditional banking system, it’s not surprising to learn that the company is considering turning to bitcoin for its digital payment needs. Dotcom threw his support behind the crypto currency via a late night tweet yesterday:
- Quote :
- Let’s give Bitcoin a boost :-) #Mega
— Kim Dotcom (@KimDotcom) February 27, 2015 While bitcoin bulls are always seeking greater adoption and publicity, association with a controversial figure and accused chronic lawbreaker like Dotcom is potentially problematic. Bitcoin’s public image is still strongly associated with the Silk Road online black market, as well as high profile incidents of fraud like the collapse of Mt. Gox. At the same time, global regulators continue to suggest that bitcoin will facilitate money laundering, terrorism, and illegal drug and weapons sales.
Being the preferred payment method of a suspected illegal file-sharing platform – acknowledging that, in the case of Mega, this remains an unsubstantiated but widely held speculation – is hardly a step in the right direction for bitcoin’s already questionable reputation.
This isn’t Dotcom’s first move in support of bitcoin and related technology. He has previously tweeted about a new blockchain-based venture called MegaNet, which he is positioning as an alternative to the global Internet. Dotcom promises that this global information platform would be more secure than the existing system in the face of growing government and corporate surveillance.
At the moment, Mega’s bitcoin ambitions are largely bluster with no concrete answers thus far as to how and when the company will implement its new payment system or what it will look like. One thing that is clear is that the company has no plans to modify its business to appease PayPal, Visa, the MPAA, or any other agitators.
The company writes:
- Quote :
- MEGA will not compromise its end-to-end user controlled encryption model and is proud to not be part of the USA business network that discriminates against legitimate international businesses.
http://pando.com/2015/02/27/kim-dotcoms-mega-is-dropped-by-paypal-over-end-to-end-encryption-may-adopt-bitcoin-instead/
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Anarcho-Capitalist, AnCaps Forum, Ancapolis, OZschwitz Contraband
“The state calls its own violence law, but that of the individual, crime.”-- Max Stirner
"Remember: Evil exists because good men don't kill the government officials committing it." -- Kurt Hofmann |
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