Marek Navratil Thesis

UNIVERSITY OF NEW YORK IN PRAGUE
European Business Administration
Utilization of the peer-to-peer file sharing technology on
the market and its role in promoting innovation
by
Marek Navrátil
2016 Mentor: William A. Cohn

Originality statement
I, Marek Navrátil, hereby declare that the material contained in this submission is original work
performed by me under the guidance and advice of my mentor, William A. Cohn. Any
contribution made to the research by others is explicitly acknowledged in the thesis.
I also declare that this work has not previously been submitted in any form for a degree or
diploma in any university.
Marek Navrátil, 4th May 2016

Acknowledgements
First and foremost I would like to thank my mentor, William A. Cohn, for his insight, support and
guidance in the process of completing my bachelor thesis. I highly value his teaching style and
efforts in promoting critical thinking. With this said I would also like to express my gratitude
towards the entire staff and members of the faculty at the University of New York in Prague and
Empire State College for the knowledge they have shared with me during my studies of Business
Administration.
For the opportunity to study at University of New York in Prague I am infinitely grateful to my
family. For the emotional and material support throughout my studies I herewith thank you all.
Last but not least, I would like to thank my fellow students, friends and colleagues with whom I
had the honors to work with. Thank you for all the fun and enrichment you brought into my life
and I wish you all the best in your future.

Table of contents
Introductory chapter………………………………………….……………...………....…….1
1. The beginning of the Internet…………………………………………..………....….….4
1.1. Division of data…………………………………………………....………..............5
1.2. Introduction of the peer-to-peer file sharing…………………....…...….…………..6
2. Exploitation of P2P technology…………………………………….…….………..……10
2.1 Live streaming ………………………………………………….…….….……….....11
2.2 P2PTV…………………………………………………………..….....…….…….…12
2.3 Search engine and privacy protection………………………….……...….….………13
2.4 Real-time communication…………………………………….………..……….……14
2.5 Content distribution…………………………………………………….……………14
2.6 Custom survey focused on the usage of P2P…..……………………….………..…..15
3. Innovation of content distribution in the digital age…………………..……….……...…..18
4. BitTorrent Bundle, P2P way of content distribution………………….……….….....……26
5. Study case of BitTorrent Sync platform………………………………………..……….…34
6. Challenge of the P2P technology on copyright
laws………………………………………………………………………………...…….…...41
7. Conclusion…………… ………………………………………………………….…..……47
8. References………....……………………………………………………………….………49

Abstract
This thesis is devoted to exploring the possibilities for utilizing the BitTorrent protocol known as
the peer-to-peer (P2P) file sharing technology/software on the market. The P2P software was
designed to enable quick and efficient data transmission between individual devices, referred to
as peers. Peer-to-peer file sharing is tightly connected to the issue of online piracy because it
enables complimentary sharing of copyrighted digital content. Unprecedented online piracy and
its controversy raises many questions in the fields of law, culture, and business. Dialogues about
copyright and intellectual property laws, the means of digital content distribution, and the
resulting impact on culture and creativity in general are the topics connected to P2P file sharing,
and therefore to this thesis as well.
After extensive qualitative and quantitative research on the following topics, in combination with
examining the opinions of individuals active and educated in the respective fields of online
piracy, file sharing, copyright law, P2P powered online applications, individual artists, the
pioneering technology company BitTorrent Inc. and its products and surveys, along with my
custom created survey -- with an appreciation that authors of creative work deserve fair
compensation for their efforts in mind at all times -- I have concluded that P2P file sharing
software has its place on the market of content distribution, where it grants more freedom to the
artists in distributing their content and collecting the revenue. By reducing the control over
information and content distribution it also enhances creativity. With respect to the emerging
issues of law and technology, it is an important matter of public policy to adapt the laws in order
to make way for the ways in which innovation is actually occurring in the digital age. P2P file
sharing does have a positive influence on culture in general in sharing information and
knowledge without restrictions. This enriches mankind.

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Introductory chapter
Since the introduction of the Internet, amount and velocity of sharing information as well as
digital content grows exponentially. Being constantly connected to the Internet is a standard in
developed countries in 2016 and a generation of technically savvy millennials is already growing
up with the technology surrounding them. Sharing information and content comes naturally for
this digital age generation. The Internet is anarchistic in its nature which is represented by the
easy access to digital content and information. The possibility of sharing files containing
copyrighted materials without charge is reshaping the world of digital content distribution and
calls for an edit to intellectual property and copyright laws as well as it calls for edit of license for
digital content (especially music) restricted by the region the consumer lives in. Much of this
debate is accelerated thanks to the existence of the peer-to-peer file sharing; P2P makes it much
easier to share digital content.
It is also important to mention the political movement of ‘Pirate Parties’ that emerged in Sweden
in 2006 and had spreaded all over the world. It is a direct reaction to persecution of the website
Pirate Bay and people behind it. This website enabled people to download ‘torrents’ which make
it possible to connect with other peers within the network and thus download copyrighted
materials for free. There is no denying that file sharing changed the world much as the Internet
did.
BitTorrent protocol which is behind the P2P file sharing as we know it today is used for
applications enabling quick and reliable file sharing. Calling the technology to be responsible for
online piracy, however, would be the same as persecuting the e-mail technology for the existence
of spam mail. The question of lost sales due to online piracy is a controversial one as well. There

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are numerous reasons for why one would download digital content illegally - without
charge. There is no proof that these ‘pirates’ do not purchase the materials they had previously
downloaded from the World Wide Web using the P2P technology. Often they do because there is
no other option of obtaining the material or for the simple reason of finding out whether it is
worth their money. There are regions of the world where some content is not being distributed at
all for various reasons.
As a mean of practically costless content distribution medium, P2P, as some studies and
observations suggest, is actually enhancing the awareness and accessibility of any digital content.
It is only natural that businesses have to adapt to new technologies on the market and to use them
for the good of the consumer.
Innovation should not be held back under any circumstances if it is not threatening people’s lives.
There is the argument of online piracy threatening profits of the people responsible for creating
movies, music, books and other possibly digitally pirated content and thus threatening the
creativity in general. My research on this topic however suggests the contrary. As a survey I have
conducted myself for the purposes of this thesis confirms, people reward P2P file sharing
technology for the effectiveness, efficiency and convenience it offers when it comes to
distribution of digital content. Having practically all the movies, music, books, software and other
content available in a few mouse-clicks serves as a great tool of spreading knowledge and culture
which in combination with more benevolent copyright laws creates a creativity-friendly
environment. At the same time it withdraws much of the control over intellectual property which
is against the grain of many copyright holders. On the other hand there is always the opportunity
to take advantage of the technology. Millions of downloads through P2P networks are being

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registered mainly with TV shows that are aired in the US on paid channels, but not available
anywhere else. Taking advantage of this world-wide market is there for the taking.
Taking advantage of P2P are many artists themselves. The study case of BitTorrent Bundle
describes this shift in digital content distribution. BitTorrent Bundle is a platform enabling
anyone to distribute original content via the P2P network of the BitTorrent Inc. which gathers
some 170 million people. (BitTorrent Inc.) General reluctance to financially support the major
players in content distribution and information oligarchs is noticeable as people feel that their
money spent on for example music is being diversified among various people who often had little
to do in the process of making the product. While the promotion efforts and distribution efforts
are made easy by the tool of the Internet.
Peer-to-peer technology is yet another tool challenging the content distribution industry, much
like the audio and video cassettes were in the past. Diversification of revenue streams is the way
to go in the times of decline of the profits from sales of physical copies. P2P technology can also
have influence in data management. Thanks to its low price in saving bandwidth and data storage
rents it makes sense to increase control over data by not uploading it to third party storages. Live
streaming is also another challenge for the technology of P2P. Internet connecting the world has a
great tool in this file sharing protocol and my research only solidified my outlook on this matter.
Peer-to-peer file sharing technology can be better utilized on the market if more people will use it
in legal ways to obtain digital content. Companies influenced by this technology should take
advantage of it and help in removing the stigma of P2P being the piracy platform.

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1. The beginning of computers and Internet
After first electronic computers were developed in 1950s, the next step was to enable
communication between them. First a man would like to be able to communicate on short
distance within simple network of computers. Naturally, exchange of data on whatever distance
in a greater network was the ultimate goal. In the year 1969, agency for advanced research
projects under the United States Department of Defense established the ARPANET (Advanced
Research Projects Agency Network). The goal of ARPANET was to design a network which
would enable computers to communicate for the purposes of US army. Moving fast forward on
the timeline of mankind after the first message was sent via the ARPANET (from University of
California to the Stanford Research Institute) - with the rapid development of technology in the
coming years, in 2016, over three billion people have access to the Internet, according to the
trusted statistical website InternetLiveStats.com, used by BBC News or United Nations (for the
conference Rio+20) and backed by the man responsible for creation of the first Internet browser
originally called the World Wide Web, Mr. Tim Berners-Lee. (internetlivestats.com)
1.1 Division of data
It is clear that there are indeed plenty of people using the Internet. The Web, in its purpose, was
created to share data. Needless to say, the amount of data available online grows exponentially
every day and the access to it is rather easy. I have divided data into two main categories in order
to elaborate the use of P2P file sharing. Both of these categories, I have called entertainment data
and general data, have their respective subcategories which are influenced by the software more
or less depending on their character.

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Entertainment data
The first is the entertainment data. This includes all kinds of data intended to be consumed for
entertainment or informational purposes, such as films, music, books and games for either
personal computers or gaming consoles. The other category I have labeled as general data.
General data is divided into two sections. One is the business data - this includes all data files and
information determined for the purpose of conducting business. Second branch of general data is
the personal data of common people. Such data would consist of personal photos, videos, various
documents or sound files, etc. I will elaborate further on all the data with due relevance to the
topic of the thesis. Below start the section about a P2P application developed by BitTorrent
designed to share data among devices.
For the entertainment data the main concern is intellectual property - copyright. Respective
authors expect to be rewarded for their creations and rightly so. However, once a file is shared
openly, the nature of Internet allows its users to share data and get around the copyright -
obtaining data with no compensation to the authors. Making such data available to the public is in
fact copyright infringement, a criminal act. It is more difficult to argue about copyright
infringement when it comes to individuals who download copyrighted data, due to fair use, but
respective owners of the copyright, such as the Motion Picture Association of America (MPAA)
and Recording Industry Association of America (RIAA) filed numerous law suits against
individual personas as well as against websites facilitating sharing of copyrighted files.

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General data
For the general data of businesses and people, it is mainly safety when we talk about transferring
data over the Internet - security and privacy of data are both very important for businesses and
people. Uploading private data to the Internet actually means storing it on a distant server
controlled by somebody else. Such servers can be compromised either legally or illegally, which
means danger to the data. Copyright, security, safety and also accessibility, these are the primary
concerns in data movement in the online environment. When sharing big files, speed is also a big
concern. The speed of traditional data exchange, the client-server exchange that is, has its limits
on the amount of data that can be sent per a period of time.
1.2 Introduction of the peer-to-peer file sharing
The core value of BitTorrent Inc., the company established by the author of the BitTorrent
protocol, is to “work with people, industries and nations to create better ways to move
information. Better ways for creators to make money,” according to the official mission
statement of the company.
The traditional way of data transferring is a relationship between a client and a server. In simple
words, one uploads a file to a distant server (controlled by another entity) and the other sends out
a request to download the file. Peer-to-peer file sharing, however, functions on the notion of no
central server in such a transfer. In this [P2P] scenario a client does not obtain desired digital
content from one central server but many other clients, referred to as peers, who are willing to
share this content and therefore act as a server. This increases the speed of the download
dramatically as well as it prevents an overload of the central server. The software was created for

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the purpose of sharing and transferring files of large size in a quicker manner, because the regular
server-to-client communication was simply not fast enough for more data more demanding in
size. Cohen’s software functions via so called torrents. Torrents are small files - once
downloaded the software clients such as BitTorrent find other peers who are sharing the desired
content. The more people are sharing the content the faster the download is.
There were multiple attempts to incorporate P2P file sharing software during the 90’s and early
2000’s. Services such as Napster or eDonkey2000 were among the most popular ones. Napster is
(in)famous as the first P2P file sharing website that enabled people to download music without
charge which resulted into a lawsuit for enabling copyright infringement. It took only six months
of Napster’s existence before first lawsuits for copyright infringement were filed against this
pioneering peer-to-peer music sharing service released in summer 1999 by John Fanning, Sean
Parker and Shawn Fanning. The service was shut down in July 2001. This is why P2P file sharing
has the shadow of a piracy platform, even though there was no intention of copyright
infringement in the mind of Bram Cohen, when he was writing the code for his P2P program, the
BitTorrent. First released version of BitTorrent came out in October 2002. Today it is the biggest
file-sharing platform which everyone who used the Internet had used whether knowingly or not.
Cohen confirmed his pure intentions when writing the program to Seth Schiesel who interviewed
him in 2004 for his article File Sharing’s New Face published in the New York Times. Just a year
after the release of the BitTorrent protocol it generated over ten percent of the entire online
traffic, according to Steven C. Corbato, who at the time was the director of the “backbone
network infrastructure for Internet2, the high-speed network consortium,” as stated in the article
mentioned above. The nature of the P2P file sharing is a nature of an innovating technology that
“pushes human experience forward,” as Lawrence Lessig, professor at Stanford Law School,

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claims in an article ‘The Future of Ideas’ from 2001, published by the San Jose Mercury News.
Lessig constantly defends the work of “disrupters” such as Sean Parker, the co-founder of
Napster, whom he considers the innovators as he highlights the conflict between control and
innovation. The copyright infringement and copyright alone as well as the change of distribution
of digital data is a great issue opened by the P2P file sharing and makes an important chapter to
understand the problematics of P2P software on the market.
As the creator of P2P file sharing as we know it today, Bram Cohen, whom had been taught how
to code by his father since he was six years of age, said himself in an interview for the New York
Times in 2004, the bandwidth available to the Internet users which was “out there” was not used
properly and did not meet the demand. To a mind of an experienced computer programmer it was
rather clear that the “upload capacity that people aren't using” can be utilized better.
As mentioned above and as the name itself suggests every computer involved in the P2P network,
a peer, is able to share data with other peers. But the advantages against the client-server data
exchange do not stop there with the speed of download improvement. As Seth Schiesel explains
in the article for New York Times where he interviewed Bram Cohen, the protocol of BitTorrent,
which is open source from the very first day, “cuts up files into many little pieces” which are
downloaded from all the peers and thus the download itself can be arbitrarily interrupted and then
continued with no effect on the end result. The client-server download simply starts over and the
file is damaged when not downloaded completely in one go. This can be compared to sending a
book via mail letter by letter. P2P does not care about the order of the letters received. Through a
special code called hash it knows how to reassemble the letters into the original book. On the
contrary client-server download only accepts full pages. Schiesel in his article also points out that

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Cohen’s BitTorrent “uses [...] a Golden Rule principle: the faster you upload, the faster you are
allowed to download.” This is a measure taken by the writer of the code in order to make the
peers share/upload the bits and pieces of the file they are downloading available to others for at
least the time period when they are downloading themselves, which is needed for the network to
be running. This makes the peers seeders. Within the same terminology leechers is the term of
peers downloading the particular file.
Another advantage of the P2P file sharing software is the bandwidth utilization. This translates
into low cost. By not employing any central servers P2P file sharing saves cost to the Internet
service providers (ISP). Amount of bandwidth is the biggest concern for every ISP; Network
bandwidth capacity in simple words is how much data a single peer consumes while connected to
the Web, whether it is uploading or downloading. Therefore it is the measure of their cost. By
using the before idle uploading capacity and downloading from other peers the bandwidth is
spread among all the users and thus it is being saved.
It took Mr. Cohen a long time to make the code work reliably, but when in 2010 he replied to a
question on Quora.com, a kind of social network website where people ask questions and other
people answer, if there would be any “key differences” to his BitTorrent code should he write it
now, he answered that no, there is not much room for improvement when it comes to the most
relevant metric of torrents - which he labelled the bandwidth utilization. In February 2016 he was
consistent with his answer with a similar question on Quora.com. He confirmed that there is not
room for any “substantial improvements” to how torrents, his BitTorrent code, works when it
comes to the most important metric in his opinion, the utilization of bandwidth. On the same day
in February 2016 Cohen also replied to the inquiry of what are the basic problems of BitTorrent.

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As the “fundamental problem” that is answered by BitTorrent he declared the problematic of
“how do you use the upload capacity of peers?” BitTorrent creates these ‘swarms’ of computers
that are sharing the desired file, which makes it faster to connect to them and at the same time it
never downloads any data the user would not request. And because peers are untrusted, the safety
measure is using codes to authenticate the data before downloading it called ‘hashes.’ Such a
hash can for example look like this ‘a9baa299dc1d2a17a4e45da72433d9f61ac235c0.’
In conclusion, the way in which P2P file sharing works is brilliant in its effectivity, simplicity
and reliability. It has great potential not only in file sharing, but as Matthew Mason, former
Content Chief Officer of BitTorrent said in an interview for science and technology magazine
Wired in 2015, BitTorrent protocol was not designed for piracy but to replace the hypertext
transfer protocol (HTTP), the very protocol the Internet is running on.
2. Exploitation of the P2P technology
The peer-to-peer file sharing technology is open source and enables exchange of data between
computers and even mobile devices. There are many ways of exploiting this technology. To this
date numerous services running on the BitTorrent protocol had been on the market and vanished,
some are on hold and some are destined to have impact in the future. Content distribution and file
sharing prevails to be the dominant field of P2P utilization. Privacy protection and real time
communication as well as live streaming are the fields in which P2P is implemented and proves
to be a valuable technology.

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2.1 Live Streaming
In 2015, Cohen, the creator of the BitTorrent protocol, was granted a patent for a live video
streaming technology based on his protocol. This might be a breakthrough on the horizon of the
industry of live broadcasting. As mentioned previously, P2P technology reduces operating costs
by sharing the bandwidth expenses among the users which also improves the speed of data
transfer. The latency of live broadcasts is usually between thirty to sixty seconds before it gets to
the audience, claims Cohen in an interview for the Torrent Freak. Cohen also adds that due to the
nature of P2P, the live broadcasts powered by this technology could push the latency down to as
much as five seconds. P2P is therefore very suitable for broadcasts of sport events or breaking
news or simply content that is popular. The nature of the transmit dictates that the more people
are engaged in the transmit the faster it is.
In the future all streaming will go over the Internet substituting the cable approach as it is much
cheaper. (Cohen, 2015) Even streaming services offering digital content such as Netflix are
exploring the possibilities of using P2P to get the content to the end user. Peer-to-peer powered
data transmission could offer a company such as Netflix even higher quality streams for a
fraction of the current costs. The costs of bandwidth are the greatest concern for streaming
companies and Netflix is the most popular one at this moment. Video streaming services
provided by Netflix and YouTube are responsible for the most of data consumption during peak
times in the North America, according to available data. The way which P2P works is that in fact
it would re-distribute the distribution cost among the customers themselves. This issue needs to
be addressed in order to determine who would pay what fraction of this cost, as different
customers consume different amounts of data. Ultimately this could be a lead to even lower cost
than what Netflix charges their customers per month today.

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The company Netflix is aware of the advantages of the P2P based broadcast, however
implementing the technology is easier said than done. While Netflix officially announced vacant
positions of P2P developers in 2015 and also tried to work directly with BitTorrent Inc. However,
there is the problem of encrypting the video all the way to the end user. This was the demand of
the content owners -- studios -- as Matt Mason, the former chief content officer with BitTorrent,
shared with me via personal message on the networking social media website LinkedIn. In those
messages he labeled security as the number one issue with which BitTorrent protocol struggles as
there is still a lot of control imposed on the data.
2.2 P2PTV
Projects of online television and video on demand powered by the peers had been executed in the
past. The most notable one is the project called Joost. This was a project started by the creators of
Skype, the online real time communication application. In the time of writing this thesis, in the
first half of the year 2016 Joost is an interrupted project due to further development of the
technology. There is clear shift recognizable on the market for video-on-demand. The way of
living in the fast paced 21st century determines the businesses to offer such services. Whether the
BitTorrent will be able to come up with solutions for the distribution of this on-demand content
which would save costs to the business is remain to be seen.

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2.3 Search engine and privacy protection
It is a well-known fact that privacy on the Internet really does not exist for a regular user. Yes,
one has passwords to private accounts, but higher entities such as governments or skilled
computer specialists, or hackers if you will, have no problems in obtaining data if needed. The
case of Edward Snowden and the NSA information collecting are a proof of this. The BitTorrent
protocol however enables people to engage in more sophisticated online behavior in order to
access information under difficult circumstances. This could be proved useful for example to a
journalist trying to obtain information in a country without safe access to all media or just to a
person trying to avoid behavioral targeting of advertisers. Tor is an application shielding identity
of a user by sending the traffic of the particular user through a network of voluntary users - much
like the peers using the BitTorrent software. A regular user can imagine this as a different kind of
Web browser. P2P is the reason behind creating Darknet -- a sphere of the online world which is
much harder to monitor by government agencies. This is a proof of Internet being a much more
complicated instrument that it appears to be which is why the dialogues about its regulations are
so complicated.
Among the most commonly used Web browser we could name the Google Chrome, Mozilla
Firefox, Opera or Safari. Less known are for example YaCy or FAROO. The last two are peer-to-
peer search engines. The most valuable thing about P2P browsers is their independence. Since
there is no central server or company owning the service, because it is powered by the peers and
their computers, there is no possible censorship or search engine optimization. Therefore one can
surf the Web without restrictions put on by governments or third party intervention. This
promotes freedom as much as possible and again confirms the thought of Internet and P2P
attitude - less control.

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2.4 Real-time communication
Globally known is the service of ‘free’ online video calls called Skype. Hundreds of millions of
accounts had been already set up with this ‘Voice over Internet Protocol’ (VoIP) application.
Skype is not completely P2P running application, however it is decentralized and thus it operates
by distributing the data transmit via its users. This is a primary example of how the Internet
serves to mankind and how low cost can the P2P protocol be functioning on.
2.5 Content distribution
Content distribution remains the number one purpose to which the BitTorrent is being used.
Faster manner of sharing information is the reason behind the protocol being designed in the first
place. P2P file sharing is in long term responsible for almost half of the Internet traffic. That is
how much data is being transferred via this protocol. There are numerous programs using the
BitTorrent protocol for file sharing which is often illegal. Saving costs is often a reason behind
using this software to obtain copyrighted data. However, this does not necessarily mean that the
file sharers never pay for content. I have decided to conduct a survey in order to learn about the
incentives of my peers as to why they use BitTorrent, how often they do pay for copyrighted
content and what is their overall attitude towards P2P file sharing and its impact on culture.
2.6 Custom survey focused on the usage of P2P
There is a new way in which digital content can be distributed legally via P2P applications. The
pioneering company BitTorrent had established one which guarantees artists income they see fit
for their creations. Before elaborating more about the application I would like to share the results
of a custom survey created and held out for the purpose of this thesis. My aim was to illustrate
the attitude of the younger generation. This is the one used to the online environment. The

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millennial generation also perceives the copyright and digital content distribution differently to
the elder ones. Despite those differences the notion of artists being eligible to receive reward
remains.
Out of thirty-eight responses, vast majority was between eighteen to twenty-five years of age.
Only one response stated not ever using P2P file sharing, downloading via torrents, before. Over
ninety-one percent of people downloaded movies. TV shows and music was the second most
popular category in downloading via torrents, using the BitTorrent protocol. Majority, around
sixty-three percent of people claimed that they downloaded content in order to save money. This
could indicate the level of price for the content being too high, too expensive. There is the fact
stated by the significant amount of the sample about content they wished to download was simply
not available anywhere else. The convenience of P2P file sharing is an obvious advantage.
Seventy-five percent of people labeled availability of practically anything as the ‘best thing’
about torrents (P2P). And over sixty-five percent of the people who answered the survey agreed
that data sharing is the purpose of the Internet and content creators/distributors need to adapt.
Questions about paying for content struck me in a positive way. Despite thirty six percent of
people claiming to never pay for music, there was a clear pattern of people willing to pay for
music they like in order to support the creators.
The most pirated medium, movies, is a specific category. It is often hard to obtain older movies
that are not on the market in sufficient quality. P2P solves this problem easily by offering the
database of people who do own desired content. Under the condition of course they are willing to
share. It is often financially uninteresting to be maintaining such a database for older movies.
However, a pay-whatever-amount for a downloadable movie would see a person paying under

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two US dollars in thirty-two percent of the times. With a bigger sample size this market could
still earn the content distributors and copyrights holders some income. If such an opportunity
would be offered to the market. Because not all people want to be considered pirates; having an
option to pay after seeing a movie was also a suggestion I have received in the survey.
Interesting is the result that despite people most of the times are pirating the content, majority of
the people do believe the entertainment distribution industries are not being hurt that much. Such
is the perception of the public.
The graphs in the reference section are representing the results of a survey conducted for the
purposes of this particular thesis. Graphs 1.0 and 2.0 represent the age and sex of all the
respondents respectively. Majority of the P2P users in general are young, in their twenties, mostly
male.
At the same time majority would not ban P2P file sharing technology as it appreciates it benefits
of sharing information, knowledge and culture respectively. (See Graph 4.0 above)
Graph 5.0 correlates to the previous one (4.0) in the opinion of the entertainment industries not
being hurt too much in the eyes of the respondents.
This data is being supported by the data about how often people buy music in the digital form as
well as physical (See graph 6.0). Further graphs are referring to why digital content is being
downloaded via P2P, whether it is music, movies or games (Graphs 7.0, 8.0 and 9.0 respectively).
Majority does so for the reason of saving financial resources with all forms of digital content.
As for the music industry again, sales of digital copies are not being completely omitted still.
(Graph 10.0) People are still buying physical copies of the music also. This medium might one

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day have a similar fate as the vinyl. Putting physical mediums into bundles with merchandise or
other extra content might prove to be the way to enhance sales in the future.
The experience of seeing a movie in a movie theater cannot be substituted easily. Entertainment
distributors tend to focus on newly released films. Other merchandise being sold along with
releasing movies is a thing people are already used to. Product placement money also creates a
significant proportion of profits to big studios. Independent film makers might profit from cheap
distribution costs that P2P platforms offer in order to generate interest and social media buzz to.
Graph 11.0 represents the willingness of people to pay for otherwise free movies they are able to
download for free.
Similar results were recorded with TV shows. This category however is specific. It is often so
that an episode is being aired likely in the US on paid cable networks. Huge fan bases are
following TV shows such as The Game of Thrones or the like. There are very limited ways for
people to be able to watch new episodes instantly. Technology allows people to record and
upload these shows online. This way people anywhere in the world can download and watch the
newest episodes literally hours after it had been aired. Merchandise is already a standard in the
world of television shows. As Matt Mason stated in his talk the TV show Heroes was able to earn
much more money in producing a game for consoles and ad-supported website with additional
content. Graph 12.0 below shows the results of why people are pirating TV shows.
The answers to why P2P file sharing is good might differ. Not paying for digital content is a very
popular answer; however in its nature it is wrong. Whether from the lawful point of view, or the

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ethical. The best feature of P2P is undoubtedly the convenience of finding desired content and
being able to download it fast if it is popular enough for people to share it. (See Graph 13.0)
3. Innovation of content distribution in the digital age
BitTorrent Inc., as the full name of this peer-to-peer file sharing company stands, really is the one
pioneering company which sets new trends and comes with new products based on the
technology its creator, Bram Cohen, invented, the BitTorrent protocol. Much like Apple Inc. it
gets into waters that are not completely researched and creates a market from it and that is the
much needed out of the box outlook any businessman needs to survive. The link to Apple Inc.
and automatically thinking of Steve Jobs, the co-founder of the company, brings to my mind
another connection these companies share. The emergence of P2P technology with Napster
changed the perception of the distribution (not only) in the music industry. As the technology
progresses we have seen the rise and fall of cassettes and the Walkman invented by Sony and a
portable CD player - Discman - as well. When the .mp3 files were introduced to the world it also
changed the market. Digital music was now a thing and instead of carrying a device into which a
medium was to be inserted, portable mp3 players were there to eliminate these mediums,
cassettes and CDs, and it was a clear step forward. Apple with Steve Jobs at the helm was the
company which changed the world of portable mp3 players with the introduction of the iPod.
However there still was the problem of how to obtain the songs in mp3 or other similar formats
legally. In 2008, Matt Mason the former chief content officer with BitTorrent, held a talk for
PopTech a movement for the overall progress of mankind, and this talk is available to watch for
example at siliconprairienews.com. At this talk he presented many interesting points. This
situation where people illegally download (pirate) music because it is easy to do but at the same

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time they have no legal alternative to it he called a market failure. And he was very much right.
In an interview for the magazine Esquire in summer 2003, Steve Jobs indirectly agrees, as it
interview was done earlier than Mason’s talk, and Jobs said that he and everybody at Apple Inc.
respectively, believes “that 80% of the people stealing stuff don’t want to be, there’s just no legal
alternative.” And that is what Apple decided to give the market a legal alternative. And Jobs
continued saying “Everybody wins. Music companies win. The artists win. Apple wins. And the
user wins, because he gets a better service and doesn’t have to be a thief.” This had been said a
day after the release of the iTunes. Service where people can legally buy an album or just
particular songs for a price just under a US dollar per song. It is not P2P based service, iTunes;
however, it is a way of how to fight piracy. And as Mason in his talk points out, the best way to
beat piracy is not to fight it, but to copy it. More about the copyright issues and other services
running on P2P are described further within this thesis. I felt it was important to bring up these
arguments and to give an introduction to another platform that BitTorrent Inc. presented to the
world in 2013. The BitTorrent Bundle.
We have seen the mediums such as audio cassettes, video cassettes to descend over time, being
replaced by superior technology the CD and a DVD respectively. Today in 2016 even the CDs
and DVDs appear to be on their way down as digital media is being distributed rather digitally
via the Internet, which only makes economic sense. The executive vice president of business
strategy for Universal Music, Larry Kenswil, understands this. In 2007, for the article for
International Herald Tribune, written by Victoria Shannon, he said that the rate by which the CD
is dying is predictable. According to Kenswil, person directly involved in the music business, it
will once “level off into a niche market,” just like the vinyl and the problem for the industry is

20
that there is no medium to replace the CD. No medium that is physical for sure. “It’s digital, but
digital is in its infancy.” (Kenswil, 2007)
Being able to adapt had always been the first law of survival. New technology always brings new
possibilities as well as issues with old norms. Many would argue that in the business world it
really is a fight for survival. The environment set by the Internet and the nature it allows to
distribute content, Shannon quotes Mr. Ferguson, head of the British Academy of Composers and
Authors, who is “nervous about how art will be sustained in the future “as he calls for “a brand
new digital business model.” In the very same article, Larry Kenswil from Universal Music
states that “as content owners, we are obligated to try everything,”
With the recess of the compact-disc there is the possibility of taking advantage of the possibilities
that the new technology offers and it is essential to explore all possible revenue streams. Many
artists nowadays feel that selling merchandise of their brand is a must. The ever pioneering
company of BitTorrent Inc. does take advantage of the P2P content distribution in a legal way
with its platform called Bundle. It is setting new standards in multimedia distribution in the
digital era as it allows artists to publish their work in an artist-to-fan way. Omitting any labels or
distribution agencies makes it more profitable to the artist as BitTorrent takes only ten percent of
the revenue, while the remaining ninety percent goes to the artist. This proves that the P2P file
sharing platform in the hands of BitTorrent was not created for the purpose of pirating digital
content. It also proves that P2P is not killing the entertainment industry, as less control stimulates
creativity. It offers, however, a new way of content distribution which leaves the distribution
agencies behind. This fact of course cannot be relished by those business entities. Thus the fight
against ‘piracy.’

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People at BitTorrent always believed that their audience, their pool of customers consists of
people who are willing to pay for digital content they enjoy and consider worth it. This audience
also is not a small one with one-hundred-twenty up to one-hundred-fifty million people who
monthly share files via the BitTorrent protocol. (TorrentFreak) Internet changed everything when
it comes to content distribution -- the fact that artists deserve to be compensated remains the
same, however. Economic losses due to peer-to-peer platforms are debatable as some studies and
rather odd calculations in lawsuits against consumers suggest. More about this problematics is
(below ;)Christian)
The belief into the audience of BitTorrent was essential to the introduction of the Bundle to the
market, as the director of communications of the software company said in 2014 during an
interview for Torrent Freak, yet another online tabloid and a grateful source of information for
this thesis as well as for anybody who follows the world of P2P file-sharing and its overall
development and situation. This belief was not just a plain hope, there is data supporting this
claim.
In 2014 BitTorrent put out a survey among their users. Barclay Ballar wrote an article published
at ITProPortal.com where he discusses the results which were also summed up in an article at the
portal Torrent Freak, written by an independent writer contributing to Torrent Freak under the
possible pseudonym Andy. The survey and results are however genuine and real. The sample
consisted of 2,500 people. There is no division of gender or age, but overall the majority of
BitTorrent protocol users tend to be male and younger, approximately sixteen to the late twenties.
The bottom line of the survey conducted by the software company is that “file-sharers are more

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engaged than the average consumer,” as Ballard writes for itportal.com. This hints that
economic losses claimed by Motion Picture Association of America, shortly MPAA and the
RIAA, Recording Industry Association of America for piracy are hard to measure as one can
hardly determine for which purpose every individual downloaded the content and whether he or
she would purchase it in the first place. On the contrary, by being able to have a free of charge
peak behind the curtains or rather under the hood one might make the decision that the product is
worthy the purchase. This is what P2P brings to the table in this area. I have conducted a survey
myself and the results are presented below -- under the closer examination of the BitTorrent
survey.
At the beginning I have divided data into two main groups and other sub-sections. However the
two most important and most talked about sections of file-sharing data are music and movies. In
the former category, music, the survey attributed the BitTorrent protocol users in comparison to
the rest of the public as “170% more likely” to pay for digital music downloads “in the past six
months” from the date of issuance of the survey. With the data of the “music industry trade
group,” the RIAA, in mind BitTorrent on premise of the survey results claimed that “its users
are eight times more likely than the average Internet user to pay for a streaming music service,”
such as Spotify, illustrated by the sixteen percent of the survey sample possessing such an account
compared to two percent of the average Internet users. Spotify is a music streaming company
established in Sweden in 2006 which launched it services in 2008 and had closed deals with
established labels such as Sony, Universal Music, Warner Music Group or EMI. According to
statista.com, portal specializing in studies and statistics, in March 2016 Spotify had “30 million
paying subscribers worldwide,” which is a ten million growth from June 2015. (statista.com)
While some might be really excited for the fact that services such as Spotify are trying to

23
rejuvenate the music industry by employing the technology, some artists might disagree. A
famous singer Taylor Swift for example ordered all her musical creations to be removed from
Spotify, because she was not happy with the amount of earnings she earned from the service.
Much like the front man of the group Radiohead, Thom Yorke, who in an interview for The
Guardian in 2013 expressed his feelings about online music streaming by saying 'I feel like as
musicians we need to fight the Spotify thing.' Before elaborating more on Yorke’s reasons and its
relation to peer-to-peer, there is also the remaining part of the BitTorrent survey.
Below is the graphical illustration of the official survey conducted by the BitTorrent Inc., part
dealing with music sharing. The survey also says that a person from the BitTorrent user base
spends on average forty-eight US dollars on music per year, while thirty-one percent of the user
base spends annually over one-hundred US dollars for downloading digital music. Results of the
survey, which according to the TorrentFreak article are depicting the torrent users as “avid” and
“eclectic” buyers of content, also say that around forty-five percent of users bought a physical
copy of recorded music in form of a CD and ten percent even purchased a vinyl record.
Proportion of purchased digital albums is even with the physical copies and there are also other
categories which serve the artists as alternative revenue streams, for example merchandise and of
course live performances.

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Source: BitTorrent User Survey, 2014; Past Year Music and Film Purchases
Movies as another important category in file-sharing and probably the most important one when
it comes to the amount of data downloaded via P2P networks was also covered in the BitTorrent
Inc. official survey. Without three percent it was half of the 2,500 respondents who paid to see a
film in a movie theater within the year that preceded the survey. Thirty-eight percent of the
respondents purchased a DVD or Blu-ray disc during the same period. (TorrentFreak, 2015)
There are also possibilities of using movie streaming accounts and purchasing digital movies,
both of these options accounted for twenty-three percent of the surveyed sample. ‘Old fashioned’
DVD rental was option twenty-two percent of people opted for and sixteen of the respondents
rented a movie digitally. According to BitTorrent Inc. which relies on its survey a person from
the pool of their audience spends on average around fifty-four US dollars per year on movies and

25
fifty-two percent of the audience pays for movies on a monthly basis, while over a third of the
BitTorrent’s audience spends on movies more than one-hundred US dollars in a single year.
Source: BitTorrent User Survey, 2014, Past Year Music and Film Purchases
“The results confirm what we knew already, that our users are super fans. They are consumers of
content and are eager to reward artists for their work,” stated Christian Averill, the director of
communications with BitTorrent. (TorrentFreak) The results of this survey are a premise on
which the software company decided to launch such an unprecedented type of application for
purchasing digital content which Averill labeled as “the most artist friendly [and] direct-to-fan
distribution platform on the market.” (TorrentFreak)
Being in the context of all things regarding online distribution of content, organizations such as
the earlier mentioned MPAA and RIAA, associations representing the interests of the music and

26
film industry, are generally and naturally against all kinds of piracy. The sample size of 2,500
people involved in the BitTorrent survey might not be the greatest sample in size, however, the
results show that P2P network is a legitimate platform for content distribution and the potential of
this P2P involved audience and their willingness to pay is greater they maybe would expect.
More data supporting this claim are described in the chapter dedicated to the BitTorrent Bundle
application within this thesis. Either way there is no getting rid of P2P - such actions would be
holding back progress while being incredibly difficult to perform while technically it is
practically impossible to wipe the applications running on the protocol out of the Web.
4. BitTorrent Bundle, P2P way of content distribution
“BitTorrent Bundle is a publishing project made with and for the world's creative community.
Our mission is to help artists connect directly with fans, inside the content they share. Today,
over 30 thousand artists use Bundle to reach an audience of more than 170 million passionate
music and film fans around the world,” reads the official statement about the application based
on the BitTorrent protocol, application called BitTorrent Bundle. David Munns, chairman and the
CEO of EMI Music North America and Vice Chairman of EMI Music World agrees that P2P
technology has its place on the market. The conditions under which he does appreciate the
network are that it compensates that authors appropriately and gives a great user experience to the
consumers. As such it is good for “music fans, good for artists, and good for the digital music
market as a whole.” (Munns, 2011)
Creative people - writers, musicians, film-makers and the like all deserve to be paid for their
creations, their time and effort. This thesis elaborates on how the P2P technology can be better

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utilized. It is clear that the forte of P2P is on the Internet. Upon the division of data, the
application ‘Bundle’ created by BitTorrent Inc., is the primary example how peer-to-peer is
utilized to enhance creation and generate value for independent artists as well as to bring even
more value to already established artist. The main purpose of business is to deliver better goods
and services, more value to the customer for his or her money. The arguments and disputes the
file-sharing protocol sparked between content distributors and the rest of the world is all about
money. But while income is the one figure determining survival on the market there still is the
customer who should be benefiting from the changes of the market the most. In the world of the
creatives where the income is unsure the one creating the content should be rewarded the most as
the artist is the one creating the value in the first place. This is where BitTorrent’s Bundle comes
and is praised not only by the consumers but mainly by the artists -- P2P cuts through the red tape
in digital content distribution. That is why it is praised so much by the artists such as Thom
Yorke, the front man of the music group called Radiohead, who released his album via the
Bundle and was very successful with it.
BitTorrent Bundle was released in 2013 and all content was offered without charge. There is
however the possibility to impose a gate on selected pieces of the bundle and give the customer
the opportunity to open this gate. During the first year of the Bundle the key would be an email
address. Artists such as Linkin Park, Moby, Public Enemy or Madonna offered bundles of files
for download. In Madonna’s case the free bundle consisted of a short film project about human
rights called “secretprojectrevolution” and people who ‘paid’ with their e-mail addresses were
due to obtain the film in 2K high-resolution format along with and interview of Madonna as well
as her private message to the fans.

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'Tomorrow's Modern Boxes' is the name of the album by Thom Yorke of Radiohead. This album
was the very first one that was published on BitTorrent Bundle for actual money. It was released
to public in September 2014, and the full price was set to six US dollars. For this amount one can
download the full album along with a music video for one of the singles. Free download would
see a customer download half of the album, four songs, and the music video as well. Within six
days Yorke’s album had recorded over one million downloads in total, as Matt Mason, chief
content officer for BitTorrent at the time, revealed to the medium consequenceofsound.net, daily
updated platform for music and entertainment, in what could be considered the company’s
official statement about the results of this experiment as Thom Yorke called this endeavor. The
full price was set to six US dollars and for this amount a customer received a bundle of files
consisting of eight songs as well as a music video for one of the singles.
Upon the artist’s request the sales figures were not disclosed, said Mason, but both the company
and the artist had been “very happy” with the results as the figures exceeded the expectations.
The artist himself hoped to find out whether the audience will be able to understand use “the
mechanics of the system.” The official statement of the company explained the Bundle to be an
“effective way of handing some control of internet commerce back to people who are creating the
work. Enabling those people who make either music, video or any other kind of digital content to
sell it themselves. Bypassing the self-elected gate-keepers.” (consequenceofsound.net) This really
sums up Yorke’s attitude towards the music industry prevailing distributors and their strategy of
monetization; the urge to hold on to the almost monopoly-like control over artists while
capitalizing on their creative work. In today’s world, the online world, things are changing and
many artists rather remain independent and might as well distribute their work on their own

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which puts them into control over their intellectual property while it also reduces the costs in
distribution.
The reduced costs were explained by BitTorrent Inc. in the official statement, after the first week
of offering an album with a money pay-gate, as follows: "The torrent mechanism does not
require any server uploading or hosting costs or ‘cloud’ malarkey. It's a self-contained
embeddable shop front. The network not only carries the traffic, it also hosts the file. The file is in
the network." (nme.com)
After a Year of Experimentation, BitTorrent Bundle Wants to Make Artists (and Itself) Money --
that is the title of an article written by Chris Leo Palermino published by the Billboard magazine
a reputable entertainment magazine. In this article Palermino repeats the fact that BitTorrent is
being “associated with music and movie piracy” from the early days of its existence. But he also
stresses the importance to differentiate the BitTorrent Inc. as a company and the file transfer
protocol BitTorrent, written by the founder of the software and technology company, writer of
the BitTorrent code, Bram Cohen.
BitTorrent Bundle is one great effort towards letting the world know what the company of
BitTorrent is about and that it should not be associated with piracy in this harming way. The
company itself “claims 170 million monthly users,” writes Palermino who once again
interviewed, Matthew Mason, the chief content officer of BitTorrent Inc. at the time. Mason
explained to Palermino why BitTorrent decided to work with music and entertainment industries
directly, while their protocol makes it possible for people to go around these industries. Mason
explained that as he was joining the company of BitTorrent, after his book The Pirate’s Dilemma

30
was published, the CEO of the company Eric Klinker, told him that the project of the greatest
value would be to “build a technology for the entertainment industries that went with the grain of
the internet.”
The mission statement of the BitTorrent Inc. is to “build a better Internet,” because the company
believes in “the Internet of options not rules” as their official website says. The Bundle is very
much reflecting these values. “We're trying to build an independent record store,” claimed Mason
in the interview for the Billboard magazine. Mason described the efforts of the team behind
Bundle as efforts for artists to “establish a direct connection with the fan” which can be
“monetized in a sustainable way.” Mason and the company believe that a “right direct-to-fan set
of publishing tools” can be “something truly revolutionary.”
And the initial data released upon today indeed prove the revolutionary character about Bundle
being a great option for both established brands in the entertainment industry as well as to the
new up-and-comers. Also there are advantages in the business model from the point of view of
the artist, which is a great stimuli for further creations in comparison with other digital media
platforms such as Apple’s iTunes, focused on selling singles and albums, or earlier mentioned
Spotify, music streaming service.
Billboard released another article in September 2014, the author was Andrew Flanagan who also
talked with Matt Mason the representative of BitTorrent Inc. Flanagan was curious about how the
platform serves to the less known artists -- Mason replied with figures.
The most important one is the number representing how many people are reached because they
use BitTorrent every month. This figure is somewhere around one-hundred-seventy millions of

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people. On daily basis there are approximately forty-millions of users who login to the BitTorrent
network.
Ryan Gary Raddon, better known under his stage name Kaskade, is an American DJ and
producer. He was the first artist to release a bundle of files, the very first one to collaborate with
BitTorrent Bundle. Between the launch of the application in 2013 up until to the date of the
interview with Billboard in September 2014, there were around one-hundred and twenty millions
downloads, Mason stated.
Mason also points out that a week after an American rapper Gerald Earl Gillum, performing
under the stage name G-Eazy, released his bundle of files consisting of unreleased tracks, photos
and videos to promote his upcoming record "These Things Happen" with BitTorrent Bundle, he
became a hit in the charts of the online music store iTunes.(Billboard) Within one month G-Eazy
recorded one million and four hundred thousand downloads. (Billboard) This might bring a
thought or two why this happened. Did people discover the artist from the buzz his BitTorrent
endeavor might have sparked but rather went to an established platform they were used to use to
purchase his music? It might be, after all BitTorrent still has the stigma of a piracy platform. Still,
Mason was assured that Bundle has its place in the market, because he thought that “there's no
clear path for new artists,” as the most successful album of the year was a soundtrack to an
animated movie Frozen and the most innovative piece of technology from Apple for iTunes was
“a tool to remove an album.” Mason thought that “there's nothing good happening out here [in
the music industry].” (Billboard)
Nevertheless, the artists remain optimistic towards the future, as results of yet another survey
conducted by the BitTorrent show. It was again the music and entertainment magazine Billboard

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which published an article about it in October 2015, written by Alex Pham who chose this title:
“BitTorrent Survey: Artists Remain Optimistic Amid Daunting Digital Challenges.” The
challenges are clear as Pham lays them out after he states that while it was never easy to make a
living as an artist in the 21st century it is “outrageously difficult” because of the “digital
marketing and distribution options” which while make it easy to publish make it “hard to get
heard” at the same time. (Pham, 2015)
Two hundred artists that previously used BitTorrent Bundle were interviewed for the purpose of
the survey about the outlook on the future in the ‘creative business’ of producing music, films
and other digital content. Majority, seventy percent are optimistic about the future and, notably,
“see self-distribution and the ability to reach fans around the world as the two most important
digitally-driven changes to the creative industry.” (http://artists.bundle.media)
As time goes, the environment and social norms are changing. "There's an opportunity for
context-driven experience with music," said Schreder director of content strategy at BitTorrent to
the magazine Billboard. “There's an opportunity to elevate the album in a digital age with
artwork, photos, interviews. We can go beyond just sharing MP3 files." (Schreder) While there
are also many more revenue streams artists need to discover and penetrate in order to make a
living in a highly competitive environment with an audience more demanding than ever, but
willing to pay for quality content. There is no denying of the fact that the possibilities of the
Internet are bringing even more inspiration with even more artists claiming their spots and
reaching their audience with the do-your-own attitude and power of the Internet.

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Source: http://artists.bundle.media/
5. Study case of the BitTorrent Sync platform
Security and privacy are the most important concerns for businesses when it comes to sharing
their data online. Every business person would like to have as much control over data as possible.
The area in which peer-to-peer file sharing can be most beneficiary to businesses is when you
have the need to share large amounts of data rather frequently and quickly; software developers,

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for example in the gaming industry, tend to have a task where the work is in progress and the
changes need to be shared with all the desired team members. BitTorrent solves the problem of
slow data transmissions in these cases; it was created for this purpose. In January 2013 the San
Francisco based company had decided to go one step further to ensure more safety, better privacy
and effectivity in file sharing -- that is why they have introduced the application called Sync.
It is an application running on a modified code of the BitTorrent protocol and gains publicity
since its release as an alternative to cloud-based data storage services, such as OneDrive,
Dropbox or Google Drive. It gains the publicity because in comparison to the mentioned
competitors it is much faster, due to the P2P technology, more private due to no outside servers
or computers being involved in the data transmission and less costly because it is free of charge.
The only area where the limitations are is the storage limits - the size of your own hard drive
limits you.
The biggest competitive advantage of the Sync against similar services which allow you to store
and share your data online is the privacy as the general manager for platforms at BitTorrent
explains at their official blog post from December 2015. With Sync you set up an infrastructure
which consists of devices, peers, of your choice only. You never upload data to a distant server
which might be compromised. Other services might be guaranteeing the privacy of the files as
well, however there are still access information such as login that are stored on public servers.
Sync also uses a “cryptographic security instead of a password-based system” and encrypts the
data in transit with the AES-128 and all your data is AES-128 encrypted in transit.” This kind of
encryption means that if a third party would want to break the code by trying all the possibilities,
which is called the brute-force attack, they would have to try 2128
possibilities, which in fact would

35
take millions of years to execute. One can also set up modes of viewing a file to enable editing or
grant read-only access. For this Sync uses X.509 digital certificates and requires mutual
validation as well as authentication.
A business team working on, or having access to, a personal computer is a perfect potential
client/user of BitTorrent Sync. Whatever task such a team might be working on should be of
digital character and privacy of the data is a high priority to the firm, whether it is an advertising
company or a team of enthusiasts developing software. On the BitTorrent company’s blog
dedicated to the Sync app there are several businesses mentioned in respective articles describing
how they are benefiting using this app. Ross Maritime is a US based shipping agency which uses
Sync to “keep critical documents synchronized between vessels, ports, and their central office.”
Adam Thompson, the co-founder and executive director of eHealth Africa which has over eight-
hundred staff members, wrote an article for the BitTorrent blog about how people in Africa
benefit from the services of the initiative which strongly relies on the Sync application. “At
eHealth Africa our mission is to deliver better public health services to vulnerable communities
through data-driven technological solutions. We have [...] offices in Kano, Nigeria, Sierra Leone,
Liberia, and Guinea, as well as developers based in Berlin,” Thompson wrote for the BitTorrent
Sync blog. The executive director praises the BitTorrent Sync application as a life saver and in
this case it can be interpreted literally. He explained how over one terabyte of not only medical
data is being monthly synchronized among the staff and points out the ability to “move data in
high-latency situations” with also the advantage of no need for restarting neither uploads or
downloads when the connection interrupts. This aspect is vital in “rural regions with extremely
poor connectivity” as we can imagine some regions in Africa are.

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Another business that thrives with Sync in areas where connectivity sometimes stumbles is
Giltrap AgriZone, a New Zealand based tractor and farm machinery dealership with over fifty
years of tradition. The salesforce of this company is highly mobile -- often travels to their
customers. Andrew Giltrap, the owner of Giltrap AgriZone also describes the benefits of the
BitTorrent application Sync to the business in an article for the official blog of BitTorrent. “It
was a constant struggle to ensure that our sales folks always had the latest pricing, collateral,
and documentation for the machinery that they were selling. We also needed a central backup
solution that worked in other direction to ensure that any data they had on their mobile phones or
laptops was synced back to the central office for redundancy,” the businessman shares with
Daniel Kadvany, product marketing manager for BitTorrent, who published the blog post in
December 2015. The agricultural supplier, Giltrap AgriZone, also appreciates Sync for its
efficiency when working on 3G mobile Internet network as well as for the possibility to set up
personal folders with read-only settings to prevent any accidental data deletion or editing. Like a
good commercial he closes his report with the statement saying “Sync just works.”
Areas that are hardly ever called rural nowadays are Shanghai and Paris. Those are the cities
where an outsourcing company Virtuous Games has offices and team members. The official blog
post of BitTorrent Sync from February 2016 had seen Daniel Kadvany talk to Jurgen Kluft, who
works as a senior technical director at the software company. Virtuous Games deals with porting
game titles from one console to another and upgrading the ever more demanding visuals - for
example from Sony’s PlayStation 4 to Microsoft owned Xbox One. This means their projects
compile of data sets between “20,000 to 16,000” files, one current project as Kluft describes
consists of ten data ‘depots’ which contain over five terabytes of compressed data. To capture the
notion of how much data that is, one terabyte of high definition video with 720p resolution would

37
play for around seven hundred and seventy seven hours which equals to a month. This is an
approximate estimate as there are many variables in the format of the video, compression
methods and others, but ten data depots with over five terabytes of digital content is enormous
amount of data to transfer. Kluft and his colleagues were using different tools to get their data
around, programs such as Perforce and Mercurial, but he recognizes BitTorrent Sync’s peer-to-
peer infrastructure as an upgrade on the two, a solution which takes “advantage of the upload
speed of all available clients to scale to even larger teams or datasets and use active
synchronization to avoid the bottleneck we were experiencing,” as Daniel Kadvany sums up in
his post for the official blog.
It is clear that BitTorrent Sync is superior to other remote storages due to its peer-to-peer
architecture. It serves well to people working in big cities with reliable Internet connection as
well to those working out in the terrain that are mobile and often have to rely on mobile Internet
connection. That is why there is also a mobile application for phones and tablets. Whether you
need to transfer just megabytes of important medical data, megabytes of data for your salesforce
or extensive amounts of data, BitTorrent Sync does the job reliably and safely, while
continuously working on the improvements of the application.
To test the speed of the upload and to be able to compare themselves to other similar service, the
BitTorrent team decided to conduct an independent experiment. In 2014, as described on the
official blog of the company, a video clip of a 1.36GB size in the format of MP4 was sent to be
shared on all following services: Dropbox, One Drive, Google Drive and Sync. Using the same
computer and measuring the time of the upload on the website time.gov. BitTorrent team was
astonished by the result themselves as they were sixteen-times faster compared to cloud storages.

38
Source: http://blog.bittorrent.com/2014/10/22/sync-speed-test-over-16-times-faster-than-the-cloud/
There were of course challengers to the security of the application, which is only good for the
development of the application. A group of computer experts, hackers, from a group called
Hackito ergo sum conducted an analysis of the BitTorrent Sync focused on its security and
privacy. Their conclusion was that Sync should not be used for storing sensitive data.
Networkworld.com an online tabloid focusing on providing news and information from the IT
world along with opinions of insights of “key decision makers who architect, deploy and manage
business solutions,” as is stated on their website networkworld.com processed the report of the

39
hacker group Hackito as well as the official response from BitTorrent, with links to their
respective and official publication platforms - blogs. BitTorrent Sync released the application
with the claims and thus slogans that it is ‘built for trust’ and gives the user ‘complete control’
over to which devices the data is shared with as there is no third party server ever included. A
neutral analysis by the group called Hackito said that there is a "probable leak of all hashes to
getsync.com and access for BitTorrent Inc. to all shared data," which is available for public to
see either with technical details on the blog of the hacker group or in short version on the
networkworld.com article published in November 2014. In an answer to this “rigorous third-
party security audit” the PR manager of BitTorrent, Kevin Fu released a statement and actually
sent an email to the editors of the networkworld.com, where he presents the counter-arguments to
Hackito’s claims about the security leaks and concludes that “BitTorrent Sync remains the most
secure and private way to move data between two or more devices.”
It is so for the reason, as Fu states in his response for networkworld.com that the “folder hashes
are not the folder key [...] and cannot be used to obtain access to the folder.” The folder hashes
are used for the process of finding the peer with the same folder. Fu also added that the hashes
cannot be guessed because it is “cryptographically impossible to guess the hash of a specific
folder.” This was also confirmed by Nick Rowe, the chief operating officer of iSec, online
security consultancy agency which granted the fact that the version of 1.4 of the BitTorrent’s
application Sync that was available in July 2014, did in its design and implementation comply to
the “generally accepted cryptographic practices.”
However, the PR manager of BitTorrent also stressed that Sync security is “completely
dependent” on the security measures taken by the user on his own device. This includes using

40
properly secure passwords, firewall configuration, etc. Sync itself cannot prevent any data
leakage or third-party intrusion into any device. This leaves the peer-to-peer based application for
private file sharing among devices in the state for which it was designed.
Sync is a very valuable tool for businesses that move big chunks of data for sure. For businesses
that operate in areas where the Internet connection might be less reliable Sync is a great tool as
well which proves the case of eHealth Africa. Another pool of customers for this platform would
be entities working with video overall for the speed of the transfer as we have seen in the
independent test conducted by the team of BitTorrent. In conclusion I feel comfortable to say that
Sync is just the perfect tool for synchronizing data for your own needs or the needs of a business
of whatever size when it comes to security, reliability and control. All this is possible thanks to
the BitTorrent protocol on which the file sharing stands, which underlines the potential and
proficiency of the P2P.
6. Technology of P2P challenging current copyright laws
Emergence and adoption of new technology usually comes and grows into the everyday life of
people faster than an adjustment of laws which might find itself in a spat with new possibilities
and norms the technology brings. In my opinion this is the case of the current copyright laws and
the technology of the peer-to-peer file sharing. Much like Mark Zuckerberg, the founder of the
social media website Facebook, I believe that the Internet is a tool with power to unify the world
and improve life conditions in the less developed parts of the world. Sure, Internet has its
drawbacks; we can observe Internet addiction for example. The notion of unlimited access to

41
information does not necessarily mean that the humankind is getting smarter. But thanks to the
Internet communication is much easier and accessibility of information had never been this
convenient.
Sharing and communication are the deeds which brought the humankind where it is today. And
every country, every nation, has its own culture which makes it unique and through which it
communicates. Sharing of this culture, some might advocate, should be made accessible to all
people without any distinction, especially in the digital age of the Internet.
One of these people is Siva Vaidhyanathan, assistant professor of culture and communication at
New York University. His opinion on the file-sharing controversy is that it undoubtedly offers “a
perfect opportunity to discuss how easily swapping songs, files, and ideas can benefit and
strengthen society,” paraphrases his thought Scott Carlson in an article for The Chronicle of
Higher Education, from 2004.
In today’s profit driven world it has hard to achieve balance and free sharing of all culture. “I
resent the fact that copyright last so long that things that should be free and convenient to use are
locked down” argues the New York University academe “I resent a legal system that makes it
too difficult and too expensive for creators to play around with the culture,” claimed
Vaidhyanathan -- the file sharing ambassador who also had written books titled Copyrights and
Copywrongs, describing the history of the copyright law, and Googlization of everything (and
why should worry) hinting the dominance of information oligarchs present online.
Lawrence Lessig, a professor of law at Stanford Law School is a big advocate of peer-to-peer
technology. He founded the Center for Internet and Society and towards file sharing he represents

42
a simple stance. About how the copyright laws are constraining our culture he writes also in his
book Remix, which is downloadable for free under the Creative Commons License. Such a license
is one of a few ‘public copyright licenses’ that allows public to share, work upon or use the work
without restrictions, while the author can be flexible on what kinds of actions he allows to be
performed without permission upon the original work. Lessig’s arguments and thoughts represent
the culture, society and economy of today, which might be called the ‘remix culture’ and the
‘hybrid economy,’ due to the controversies we are facing with digital content distribution and the
disruptions that P2P file sharing brings along to the economy. As much as he is pro P2P he is also
pro adjustment of the current copyright laws because he believes that it is obsolete in the light of
the new technology.
In a radio talk show Fresh Air in 2008 on the National Public Radio (NPR) stations, professor
Lawrence Lessig was hosted by Terry Gross to talk about file sharing and copyright. Lessig
expressed his views on the need for an update on copyright laws “to fit the digital reality” we are
being part of at the moment. If not, today’s kids and teenagers would be seen as criminals in the
future. Lessig believes so for the reason of the opportunities that the Internet offers. Opportunities
to “explore and to share and to get access to all sort of material,” he claims. To this the
professor of law, Lawrence Lessig, adds that since the P2P file sharing technology emerged at the
dawn of the new millennium, the amount of data shared via this network of peers has gone up
“dramatically, despite an extraordinary effort by copyright holders, administrators at schools,
parents, teachers to stop kids from doing this.” (Fresh Air Philadelphia, NPR)
Furthermore, Lessig also alerts of the idea of “shrinking of the public domain” and how it could
devastate the culture as we know it, his ideas on this topic were published in Calgary Herald in

43
2004. (Cohen) To revive the public domain Lessig offered an “array of eminently sensible
approaches.” (Cohen) Two fundamental points according to Lessig are “shorter copyright
terms” and “more robust interpretation of fair use.” (Cohen) Lessig also calls for “extending
compulsory licenses” which is a system that would allow radio stations to play all kinds of
copyrighted music as long as they pay “a legally set royalty.” Of course artists do deserve to be
rewarded for their efforts. How these reforms would be put in practice is a question even Lessig
finds hard to answer, writes Cohen for the Calgary Herald and adds that corporations did invest
significant amounts of money for lobbying and campaign support purposes in order to “extend
their property rights.”
According to the World Intellectual Property Organization (WIPO), intellectual property as
such “refers to creations of the mind, such as inventions; literary and artistic works; designs;
and symbols, names and images used in commerce.” (wipo.int) Intellectual property is protected
by law in the forms of patents, trademarks and copyright. These tools enable authors to “earn
recognition or financial benefit from what they invent or create.” The official description of
intellectual property (IP) by the WIPO also says that the IP system aims to “foster an
environment in which creativity and innovation can flourish” and this is accomplished by
“striking the right balance between the interests of innovators and the wider public interest.”
“To participate in culture is to share,” claims Vaidhyanathan from the University of New York.
Vaidhyanathan also thinks that the problem of P2P file sharing is in fact social as he accuses
government and content holders from trying to create laws and write code to stop “the free flow
of information,” as stated for The Chronicle of Higher Education. (Vaidhyanathan) Lessig agrees
with this notion as he himself started to use the phrase “code is law.” And it indeed is, even

44
though the original thought of the purpose of the Internet (especially the 2.0 version which
enabled more users to create their own content in the form of websites, rather than only consume)
was to give control to the end user, also according to BitTorrent.
How far and how powerful should a copyright law be not to prevent education, sharing of culture
and enhancing new creations -- inspired by the already created projects? That is a difficult
question indeed. When it comes to art (music, movies, books) it is maybe easier especially now
with at least some experience of re-using already released works - as we had seen with hip-hop
music which often samples parts of various songs to create a new ‘beat’. My thoughts on this area
of re-using work of others is simple and in my opinion widely accepted. Just like quoting and
giving credit in writing a thesis or a paper at school, acknowledging work of others that possibly
inspired to create is firstly necessary, ethical and desirable. Partial monetary compensation is also
an option which would make all parties happy.
When we deal with sharing copyrighted material, it is however more difficult. Legal ways to
protect copyrighted materials would include acts such as the 1998 Digital millennium Copyright
Act. Its purpose is to prevent people from hacking software in breaking into software and to
modify it. Good for protection of the copyright, but it might hold back people from improving or
enhancing upon the software. The conflict between innovation and control that might arise from
it is described by Guy Lasnier who in 2001 wrote for the Knight Ridder Tribune News Service,
where he describes the dispute between Sony and a group of technically skilled enthusiasts who
were able to break into their software. A product called ‘Aibo’ is a robot developed at Sony, the
Japanese technology company, which simulates a dog. It has implemented ‘software kits’ which

45
were hacked and the mentioned enthusiast were able to write their own code which lets the
‘Aibo’ to perform new tricks. Under the 1998 Digital Millennium Copyright Act Sony urged for
the code of the third party to be removed from the Internet - oddly instead of adopting it and
rewarding the outside creators. This is an example of how control can hold back innovation.
Much like the efforts of content distributors to prevent the P2P technology.
How much power and to what extent a copyright should be reaching is a difficult question driven
by the revenues, as always. Copyright holders, of course, would advocate for unlimited
copyright, once they own the intellectual property. One could say even though it is not tangible it
should possess the same rights as physical property. Much telling is the statistic of how many
times the length of copyright was extended in the past forty years. In 1998, the Sonny Bono
Copyright Term Extension Act was the eleventh prolongation and it gave the copyright twenty
more years of duration.
With music and movies, melodies and characters, it is more complicated now in 2016 than it was
before, in the 20th century. Again - Internet is just taking down all the barriers and it seems to be
harder and harder for big corporations of the entertainment industry to control the intellectual
property they own, compared to what they were used to before. Ultimately the one responsible
for all the revenue losses and decreased control over content overall in the eyes of the
entertainment industry is the online piracy.
Scott Turow, Harvard law graduate, an internationally successful writer and president of the
Authors Guild in the US, is categorically against online piracy. His field is books, which today
have largely turned into digital market as well - eBook’s. In the article The future of digital books

46
written by Peter Ollier in April 2011, it is said how the music industry managed to survive thanks
to diversification into “live music and merchandise.” To this, Turow opposes that he does not
believe, however, that as many people will show up to his author reading as to “hear Beyoncé
sing.” Turow blames all possible entities, even libraries for the "rapidly depleting" incomes for
writers in general and sees it as the "slow death" of an American author -- online piracy and
insufficient protection of the copyright. There are many ways in which his arguments are wrong.
The times are changing and reading Turow’s agenda made me remember the arguments that the
beloved Paul McCartney of The Beatles used when he was asked about online piracy. McCartney
was also categorically against and rooted for complete ban of it. Yes, obtaining copyrighted
material for free is not right. However, the technology is here and always will be. Thus there is
the need of adaptation to it and there is also the need to offer customers added value for their
money. Ollier also writes that there are “no comprehensive, up-to-date and accurate studies
available” to prove if and how piracy is devastating the industry. Brian O’Leary, founder and
principal of publishing consultancy Magalla Media Partners is paraphrased by Ollier in his article
from 2011 and it is made clear that the “sales for books that were pirated tended to increase.”
O’Leary is said to be monitoring the “effect of piracy on book sales” at O’Reilly Media,
company publishing books focused on technology. This is indeed the effect of piracy as it has
reasons behind it happening in the first place. Some books are simply not available in some
countries, as well as other media.
7. Conclusion
Sharing information is the ultimate purpose of the Internet. Peer-to-peer (P2P) technology is in
many ways very important piece of software. The fact that it can actually substitute for the
hypertext transfer protocol (HTTP) which is the foundation of data communication speaks for

47
itself. The occurrence of online piracy is a natural consequence of the technology and it is upon
the distributors and creators to adapt to this reality. The foundations of the World Wide Web
(WWW) were built upon the use of centralized servers and it is unlikely for the P2P to overtake
these fundamentals in the near future. However there is practically no way of getting rid of this
technology in the sense of preventing online piracy. Even radical government intervention would
not be able to get rid of it.
The only way to fight online piracy is to offer suitable alternative to it. That is what BitTorrent
Inc. is trying to do with their digital content distribution product, the BitTorrent Bundle. By
enabling artists to publish their creation for essentially no cost and keeping only ten percent of
the profits, it redefines the way of digital content distribution. It indeed might shake the
respective industries, because it gives artists more freedom and independence in dealing with
their content. In other words there is less demand for third party labels and advertising in the
digital age.
The argument of online piracy, which is almost synonymous to the P2P technology, limiting
creativity and choking the entertainment business is also fallacious. It only restricts the control of
third parties as it establishes unprecedented artist-to-audience business model. As the P2P
technology enables distribution of the content to everybody with Internet connection for fraction
of the price it cannot be argued that it is hurting the development of mankind. Peer-to-peer file
sharing technology promotes sharing of knowledge, culture and information. Thus it has a
positive impact on the global culture. Through diversification of products there are new
possibilities of revenue streams emerging for both music and film industries.

48
In the fast paced digital age of the 21st century it seems that intellectual property and copyright
laws are being left behind the development that the Internet brought.
P2P Means of the Internet made distribution of digital media very easy in the 21st century. In
particular the emergence of the peer-to-peer file sharing technology in the early 2000’s; P2P
improved the traditional ways of sharing digital files via the Web. It improves two main aspects
of data exchange: the cost and the speed of it. The former by lowering the bandwidth demands on
the Internet service providers and the latter is in direct proportion with the number of peers
making the particular data available - with P2P one downloads the data fragments from multiple
computers acting as servers. Remaining issue of data exchange, safety and privacy, is a question
of the technology which is being worked on constantly since the introduction of the P2P
technology to the world.

49
8. References
Graph 1.0 Graph 2.0
Vast majority of the respondents did engage in P2P file sharing as the Graph 3.0 below shows

51
Graph 6.0
Graph 7.0 below, with yellow graphics, represents the category of movies being downloaded via
P2P by the participants of my survey. Green graphics is for the games (Graph 8.0), understood as
either PC or console titles of entertainment software.

54
-- Graph 10.0 Graph 11.0 --

56
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