An anonymous reader writes: After months of hype riding the coattails of the MegaUpload controversy, Kim Dotcom's new cloud storage site, Mega, is finally going live. Available to early adopters already, it's open to the public tomorrow with 50GB of free storage and end-to-end encryption. Several outlets have posted early hands-on reports for the service, including Ars Technica and The Next Web. In an interview, Dotcom spoke about how Mega's encryption scheme benefits both the users and the company: 'The Mega business plan will be a distributed model, with hundreds of companies large and small, around the world, hosting files. A hosting company can be huge or it can own just two or three servers Dotcom says—just as long as it’s located outside the U.S. "Each file will be kept with at least two different hosters, [in] at least two different locations," said Dotcom. "That’s a great added benefit for us because you can work with the smallest, most unreliable [hosting] companies. It doesn't matter because they can’t do anything with that data." More than 1000 hosts answered a request for expressions of interest on the Mega home page. Dotcom says several hundred will be active partners within months.' On top of that, the way it's designed will protect Mega from legal problems: 'It's all about the plausible deniability. Mega doesn't know what you're uploading.
... Mega isn't so much securing your files for you as it is securing itself from your files. If Mega just takes down all the DMCAed links, it will have a 100 percent copyrighted material takedown record as far as its own knowledge is concerned. It literally can't know about cases that aren't actively pointed out to it, complete with file decryption keys.'