Kim Dotcom’s newest file-sharing site MEGA got off to flying start yesterday, with more than one million new users registered in the first 24 hours, according to some reports. But despite this early success, many will be privately wondering to themselves whether or not MEGA can successfully avoid another government takedown.

To answer this question, we need to understand how MEGA differs from its predecessor. In actual fact, there’s only one crucial difference between the old site and its newest incarnation, but it’s an important one – MEGA encrypts its user’s files.

Unlike with MegaUpload, which contained a search facility that allowed users to search through all files uploaded to the site, MEGA allows users to control who can access their files and who can’t, meaning that those who do upload copyrighted content are unlikely to be caught – so long as they keep it hidden from prying eyes.

MEGA uses a sophisticated encryption system through which users can encode the files they upload onto the site. Once uploaded, each file is then issued with a decryption key that only the file owner has access to, meaning that they are in full control of who they share that file with – even MEGA will be unable to access the files without permission from the owner.

According to Dotom, what this means (in theory) is that MEGA will not have any liability for those users who upload and distribute copyrighted content.  Wikibon founder and lead analyst Dave Vellante agrees, noting the infrastructure’s design as a shield to legal threats in the future.  In the video below, Vellante explains in more detail how this could set the new MEGA apart:

But is Dotcom right when he boasts that MEGA is “100% Safe & Unstoppable”?

That’s a pretty confident claim to make, but the reality is that it will once again come down to how copyright laws are interpreted.

The Motion Pictures Association of America has already come out and said that just because MEGA encrypts its files, doesn’t mean it will get away with hosting content that infringes copyright.

“We’ll reserve final judgment until we have a chance to analyze the new project. But given Kim Dotcom’s history, count us as skeptical,” said a spokesperson in an interview with Reuters.

Ultimately, everything hinges on whether or not MEGA complies with the Digital Millennium Copyright Act (DMCA), which is the law used to deal with websites that host copyright-infringing material. Under the DMCA, copyright holders have the right to demand that a website take down infringing content as soon as it comes to their attention. So long as the site owners comply with such a request in a timely manner, they shouldn’t face any legal consequences.

If Dotcom and his team act every time they receive a takedown request, and diligently pull copyrighted files from MEGA, they should (in theory) have no problems with the law. But the issue is no different to the one that faced MegaUpload before – and the question of whether or not Dotcom infringed any copyright, and whether or not they are liable for that, is at the core of the current, ongoing investigation.

Should the court find that MegaUpload contravened the DMCA, then the likelihood is that authorities can make a similar case against MEGA (presuming that at least one user is caught out sharing copyrighted material).

However, should the court decide that Dotcom and his team were actually adhering to DMCA laws, it would mean that the authorities were wrong to take MegaUpload down in the first place – yet such a ruling might not make much difference in the case of MEGA. The very fact that the authorities shut down MegaUpload in the first place, purely on suspicion of infringing the DMCA, means that they could easily decide to act with the same kind of impunity again.

There’s no doubt that Dotcom continues to walk a legal tightrope, but at least the man himself is in a confident mood – the moment MEGA was launched, Kim Dotcom reportedly tweeted “the US government fails and Innovation wins.”