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Megaupload founder Kim Dotcom is launching a new file-sharing service: Mega. Mega is just like Megaupload but will be safe from raids and government interference because files uploaded to Mega will be encrypted and only the user will have the unique key to decrypt the file.

It will be up to users, and third-party app developers, to control access to any given uploaded file, be it a song, movie, videogame, book, or simple text document. Internet libertarians will surely embrace this new capability. And because the decryption key is not stored with Mega, the company would have no means to view the uploaded file on its server.

It would, Ortmann explains, be impossible for Mega to know, or be responsible for, its users’ uploaded content - a state of affairs engineered to create an ironclad “safe harbor” from liability for Mega, and added piece of mind for the user. Pretty clever, if the government comes a knockin’ on a data center or if someone hacks it, they’ll get nothing.

Dotcom says, “whatever is uploaded to the site, it is going to be remain closed and private without the key.” Basically, the idea is that the law doesn’t have a centralized entity to go after because they can’t come after Mega because Mega has no idea what’s on their servers. Dotcom believes that the only way that this could be illegal would be if the law made encryption illegal.

Check out the full report at Wired. If Mega really works the way Dotcom wants it to, Megaupload is going to come back bigger, better and more impossible to take down than ever.