[00:00.000 --> 00:04.800] Kim.com. He’s been called the Titan of terabytes, the El Chapo of file sharing,
[00:04.800 --> 00:08.960] and the king of copyright infringement. If you don’t know him, he’s a mega hacker and mega
[00:08.960 --> 00:14.560] businessman who ran a digital empire called Mega in the early 2000s. Its cash cow mega upload had
[00:14.560 --> 00:19.600] millions of daily active users and brought in over $175 million in revenue. The website was
[00:19.600 --> 00:24.240] brilliant, both for its user-friendly frontend UI and distributed backend that allowed people
[00:24.240 --> 00:28.160] to share massive files around the world, which was almost unheard of at the time.
[00:28.160 --> 00:32.720] There was just one problem. The website made its money by selling ads, and those ads were served
[00:32.720 --> 00:38.640] primarily on pirated material, like movies, music, and software. In 2012, the FBI shut down mega
[00:38.640 --> 00:43.280] upload and raided Kim’s mansion in New Zealand. But for the last decade, he’s managed to avoid
[00:43.280 --> 00:48.160] extradition to the United States and has remained a high-profile rich dude. That is until yesterday,
[00:48.160 --> 00:52.240] when a New Zealand judge ruled that he could be handed over to the United States to be tried as
[00:52.240 --> 00:56.800] a pirate. In today’s video, we’ll look at the mega crazy story of Kim.com and the technical
[00:56.800 --> 01:02.080] features behind mega upload. It is August 15th, 2024, and you’re watching The Code Report. Kim
[01:02.080 --> 01:06.880] Schmitz is a German hacker who got famous as a teenager when he hacked into NASA in the Pentagon.
[01:06.880 --> 01:11.040] That’s pretty based, but in 1994, he was arrested for selling hacked phone numbers,
[01:11.040 --> 01:15.840] then convicted of more hacking charges in 98, but never did any significant jail time because the
[01:15.840 --> 01:20.480] judge chalked it up to youthful foolishness. He then pushed his luck further in 2001 when he
[01:20.480 --> 01:25.600] bought a bankrupt website called Let’s Buy It.com during the dot com crash. He told everyone he was
[01:25.600 --> 01:29.920] going to pump a bunch of money into it, and after the stock went up, he dumped it for a quick profit.
[01:29.920 --> 01:33.840] He was doing pump and dump rug pulls before they were cool. He tried to move to Thailand and fake
[01:33.840 --> 01:38.080] his own death, but once again was arrested and once again received a suspended sentence.
[01:38.080 --> 01:42.400] Despite his convictions, he eventually immigrated to New Zealand on an investor visa, and that
[01:42.400 --> 01:47.520] brings us to 2005 and the rise of Kim’s mega empire. It was a collection of websites that
[01:47.520 --> 01:52.160] did everything from payment processing to philanthropy, but its core service was file
[01:52.160 --> 01:57.680] uploads, like a precursor to Dropbox or Google Drive. Its HTML-based UI was faster and easier
[01:57.680 --> 02:02.800] than iTunes, but most importantly, it allowed anyone to upload extremely large files. These
[02:02.800 --> 02:06.880] uploads could be paused and resumed, and each download would generate a unique link that could
[02:06.880 --> 02:11.040] be shared with your friends, and they were able to scale to a massive level with techniques like
[02:11.040 --> 02:15.840] file deduplication, where a hash is generated for a file, so if you try to upload the same pirated
[02:15.840 --> 02:20.480] Seinfeld episode twice, it only actually takes up the space of one file. Mega also had a certain
[02:20.480 --> 02:24.480] level of security and encryption to protect user data, but it wasn’t totally anonymous,
[02:24.480 --> 02:28.560] and after the seizure, none of the users got their data back, although Mega Upload continues
[02:28.560 --> 02:33.760] to live on as Mega. Nowadays, Mega uses zero-knowledge encryption, where data is encrypted on both the
[02:33.760 --> 02:38.000] client and the server, so no third party, including Mega, can know what you uploaded. What was
[02:38.000 --> 02:43.040] absolutely genius, though, is that Mega Upload had an affiliate program that rewarded users for
[02:43.040 --> 02:48.480] generating downloads, which eventually snowballed into Mega accounting for 4% of global internet
[02:48.480 --> 02:52.960] traffic and wheelbarrows filled with money for Kim. Unfortunately, the party came to an end in
[02:52.960 --> 02:58.000] 2012 when the website was shut down, the servers were seized, and Kim’s New Zealand mansion was
[02:58.000 --> 03:02.640] raided. They took everything, including his Toyota Velfire. Now, Uncle Sam has been trying to get his
[03:02.640 --> 03:06.880] hands on him ever since, but New Zealand screwed up the search warrant and spied on him illegally,
[03:06.880 --> 03:10.400] and his extradition has been delayed multiple times, but now it looks like the walls are
[03:10.400 --> 03:14.720] closing in and the United States has the green light to take him. In addition, last year, two
[03:14.720 --> 03:18.560] former Mega Upload executives were sentenced to prison, but the real guy they want to make an
[03:18.560 --> 03:23.760] example of is Kim.com. They say he cost the entertainment industry $500 million, but there’s
[03:23.760 --> 03:28.480] multiple philosophical debates to be had here, like is piracy actually theft, is privacy a
[03:28.480 --> 03:32.800] fundamental right for people on the internet, and should cloud providers retain data and give access
[03:32.800 --> 03:37.120] to the government for criminal investigations? Some things are always morally correct, like
[03:37.120 --> 03:41.920] pirating Adobe products, but for many of these issues, there’s no clear answer. Kim.com has been
[03:41.920 --> 03:46.160] a huge advocate for privacy on the internet, and he’s denied that Mega Upload was designed to
[03:46.160 --> 03:50.560] encourage copyright infringement. Instead, it’s just a content-neutral platform and shouldn’t be
[03:50.560 --> 03:54.720] liable, like in the same way that an internet service provider shouldn’t be liable for illegal
[03:54.720 --> 03:59.040] activity. That argument’s probably not going to work in federal court, but don’t worry, Kim has
[03:59.040 --> 04:03.600] a plan. Some people think he might slip away into Russia to go live with Tupac and Michael Jackson
[04:03.600 --> 04:08.160] in Siberia. The only problem with that plan is that Russia’s not very privacy-focused and just
[04:08.160 --> 04:12.640] recently banned the encrypted messaging app Signal. One thing’s for sure though, Kim.com won’t go to
[04:12.640 --> 04:16.960] jail without a mega fight. This has been The Code Report, thanks for watching, and I will see you in
[04:16.960 --> 04:18.560] the next one.