Internet entrepreneur Kim Dotcom, whose new business has stalled at launch.
Internet entrepreneur Kim Dotcom, whose new business has stalled at launch.
Kim Dotcom's launch of his latest venture has hit a last-minute problem, aborting its launch on the fifth anniversary of the FBI-inspired raid which saw the entrepreneur arrested.
The reason for the stall is unknown but it came with less than 90 minutes before it was due to launch.
Dotcom had forecast the new online storage and payment system would be worth billions of dollars.
But after forecasting the imminent launch about 5am today, Dotcom posted to Twitter: 'Sorry but there has been an expected hiccup. Will tell you all about it later today. Let this play out and give me some time to update you.'
He followed with a tweet stating calling the problem a 'roadblock' which would take 'a day or two' to resolve.
When the Herald asked early afternoon, Dotcom emailed to say: 'We hit a roadblock today with the next incarnation called Megaupload 2.0 and our Bitcoin driven micro-transaction platform Bitcache.
'We are working on it and I can't comment on what happened yet.
'It's just more of the usual problems I have to deal with since the US Government sent a New Zealand based anti-terror commando to my home for what is in fact a claim of civil copyright infringement and nothing criminal under both New Zealand and US law.'
Dotcom has been on bail in New Zealand awaiting extradition since January 20, 2012, when he and three others were arrested on US charges relating to his Megaupload business.
Megaupload, which operated out of Hong Kong, was a massively popular website hosting movies and music, leading to claims of massive internet piracy.
Dotcom and his co-defendants - who are all currently waiting on an appeal decision following a court order they be extradited - have always denied the US charges, which could land them in federal prison for decades.
The Companies Office has a number of listings which appear to be vehicles associated with the new businesses - MU2 Ltd, Bitcache Technologies Ltd and Bitcache Ltd. The businesses resolve ownership to trust companies in the Cook Islands and Cayman Islands.
The delay to the launch will have seriously irked Dotcom, who has worked hard to mark the anniversary of his arrest with a high profile event that will draw attention to the destruction of Megaupload and the charges against him and others who worked on the site.
A year after the destruction of Megaupload, which Dotcom said had been valued at US$2.4 billion, he and his co-defendants launched the encrypted Mega cyberlocker. The launch happened on the anniversary in a song-and-dance spectacular at the $30m Coatesville mansion where Dotcom was living at the time.
Kim Dotcom's Mega Launch in 2013 at the Dotcom Mansion north of Auckland. Photo / Norrie Montgomery.
Mega was innovative in providing browser-based encryption - a huge step-forward in user privacy.
While Dotcom made an estimated $30m selling shares in the business, he fell out with co-defendants Mathias Ortman and Bram van der Kolk, the skilled coders who built Megaupload and then Mega.
Ortman and van der Kolk have stayed with Mega while Dotcom has taken to making critical comments online over the past year as he prepared his new business for launch.
The new business was to be called Megaupload 2.0, a storage site, and was to be launched alongside Bitcache, a micro-transaction service.
Bitcache was intended to use Bitcoin as the base currency to pay for the content shared on Megaupload 2.0 and other content sites which took up the idea.
Coder Mathias Ortmann, who built the Megaupload website and helped build Mega, is also facing extradition to the US.
Doing so would provide the business a layer of protection which Mega did not have. While Mega received rave reviews and strong numbers of sign-ups, it suffered through its associations with the Megaupload defendants as online and credit card means of payment refused to be associated with the business.
With the new business, Bitcoin is at its core. Securing the business in an internet-based currency would protect it from any pressure the US might bring to bear on payment handlers like PayPal or the credit card companies.
For Megaupload 2.0 and Bitcache, transactions were intended to take place along a blockchain - a string of data which operates as an unchangeable, living ledger of information. It appears that the Bitcoin would step off into the transaction which would be conducted by Bitcache and then emerge again once it was complete.
In the lead up to the launch, Dotcom has been massively pushing Bitcoin as the future of currency. Over the course of the past year, Bitcoin has doubled its value from around US$400 for one Bitcoin to its current US$890 value.
Coder Bram Van der Kolk, who worked on Megaupload and helped build Mega, is also facing extradition to the US.
Dotcom's scheme has some similarity to an idea called MegaKey which he was working on prior to the FBI raid in 2012. The 'MegaKey' would install on users' computers and strip adverts from incoming websites, replacing it with adverts or content controlled by MegaKey which had been sold to others.
In an interview with RT's Max Keiser late last year, Dotcom said the new business would create a revenue stream for content creators of all sorts - even news sites.
'I want to bring Bitcoin to the mainstream. I want Bitcoin to be the thing everyone uses. We're going to open a new door of monetisation that is currently not available on the internet. You can put your bitcache container file on any online storage service.'
Dotcom told the Russian government-funded RT that the business would be 'much more than a new file sharing site'.
'It's a vision to strengthen internet freedom and to strengthen our basic human rights and privacy. It's going to liberate us.'
Asked by Keiser how it compared to Megaupload, he said: 'Megaupload 2.0 and Bitcache is better than anything I have ever done. I think this will be bigger than anything I have done.'
