Should it exist? Well sometimes important content is illegal, such as political content in China. It’s good to have a way to publish important illegal content, even if bad stuff slips through.
What if someone posts illegal violent or sexual content? That is unfortunate, but it means that a real person took the time to post such content on the network. Keeping them from speaking will not change their warped beliefs, it will just hide them from the world and keep people from remembering that evil people exist. The person who published the content should be punished through existing regulations and the content should stay on the network to remind us that some people are horrible. Hopefully no one accesses it.
See https://www.microsoft.com/en-us/photodna
If someone pre-encrypts data and then uploads that to Dropbox, it gets more complicated and AFAIK involves more of monitoring the IP addresses that things are coming from and/or being shared to.
Also, I'm not sure what scenario in which you would be able to find the encryption key, yet not have access to the wallet controlling the contracts? Even if you did, I'm not sure why hosts could not assist in cancelling contracts in a similar fashion to cloud providers taking down content on request.
I am not a lawyer and this is not legal advice, but as a third party you are not responsible for illegal data uploaded to your server/machine so long as you are not aware that it is illegal data. Once you are informed that there is illegal data on your machine, you have 24 hours to remove it.
You don't have any real proof that Company XYZ aren't using your money to do bad things.
You would stop participating if it turned out the Sia network was mostly used for bad things. In the same vein, you may choose not to use Amazon because it is unfairly treating warehouse workers.
For encrypted data, I think it will be similar to the situation with other storage providers. If law enforcement searches your computer and discovers that you've uploaded illegal content in encrypted form to S3/GCS/Mega (especially Mega because they make it so easy to upload client-side encrypted data), then law enforcement will order the provider to destroy all copies of the data.
It will be interesting to see what happens if the provider is a Sia host. Law enforcement entities have standard processes for reporting illegal content to Amazon/Google/Mega/etc, and those companies have teams responsible for handling those requests. Casual Sia hosts currently wouldn't know how to handle such a request. The outcome might be that the compliance costs are too big for casual home users, so hosting on Sia becomes a specialized task that only dedicated companies can provide.
Sia's encryption doesn't protect the file hosts, if the uploader posts a link + decryption keys for pirated content to a public file sharing forum.
Does the take down notice go to everyone that hosts a fragment of the file? Who is liable if the uploader can't be traced?
I suppose that would only work if whatever keys the pirate needed to publish to allow the data to be downloaded wouldn't _also_ give the keyholder the ability to delete that data. Otherwise the copyright holder could just issue the command to delete the file themselves. I'm not sure if Sia works that way or not; would be interesting to see.
A complete S3-like service would require a third-party tool on top of Sia. Goobox[1], for example, uses sia as a storage backend and provides an S3-compatible API[2].
In other words, right now - I think if you are interacting with Sia directly you can do whatever you want with the files you have access to. Not 100% sure about that.
[1] - https://goobox.io/
[2] - https://doc.goobox.io/#section/Why-you-should-choose-Goobox-...
[0] - https://siaprime.net/
So if I am busted and my key/etc compromised, it is possible that those hosts are compromised as well.
This says nothing of Sia's implementation, just that encryption itself does nothing to prevent a party from being prosecuted from illegal content.
Though, I feel like you're injecting meaning into my reply. I was replying to your comment about how authorities wouldn't know if content on my computer (a Sia host) was illegal. My point was simply illustrating that encryption by itself does not prevent me from being the host of illegal or illicit content.
[1]: probably not implemented yet.
Say you have a pro-democracy pamphlet on your hard-drive in China. If they find it they would imprison you no doubt but they don't care so much to look for it, and it is hard to find if you never share it with anybody.
SIA provides private storage so if your only crime is possessing illegal content but never sharing it with anybody no big deal (I would assume). But if you share it then SIA can not protect you because the exchange must happen somewhere outside of SIA.
You'd be wrong - people get nabbed for having or creating child porn, not just distributing it.
It would be an interesting case for the Supreme Court. Did you do something illegal by allowing SIA to store encrypted data on your hard-disk not knowing what it was?
1) If childporn was not banned, how many people would consume that content anyway?
2) What about hyper-photorealistic childporn movies with fictional characters and future rendering technologies? How will you tell the video is true or not and worth to be removed?