Big-Tracker Finances

As I mentioned yesterday, I am seriously strapped for time this evening and won't be able to continue my announce-writing series as I had intended. I'll do some coding over the weekend and hopefully get things going again on Monday.

Early in the life of the blog, I discussed the financial logistics of running a small tracker. Well, TorrentFries grew out of that phase. As you grow, so does the complexity of your bookkeeping.

Obviously, the cost of hosting increases as you move to faster and faster servers. However, things also become a lot less predictable. I've previously advised that contingency is a good thing, and nowhere is this more true than in the case of finances. While you're small beans, you will probably be paying the same cost every month for a long time. Hosting is predictable, although we were impacted by the dropping US dollar, which caused our hosting costs (charged in euro) to increase without any benefit to us. Of course, we were growing and becoming richer as time went on, so that was more annoying than difficult.

Eventually, it is likely that donations will outstrip expenses. Don't let it go to your head and don't squander the money. A big site is always in danger of being taken offline or even coming under threat from the copyright police. Having a slush fund handy is invaluable, since you won't even be able to beg for money with the site down. At one point, we had as much as $800 in reserve, plenty to get us a new server if need be. In fact, we were saving up to build our own box to colocate somewhere friendly. That didn't end up happening, but it certainly could have with a few more months. At the time, we were making about $30/mo in ad revenues (Project Wonderful is not the most profitable provider around) and over $500/mo in donations, although donors are fickle and hard to rely on – another good argument for a slush fund.

Now, running into trouble with PayPal (which I assume you are using for your finances) is another concern. I suggest spreading your wealth across multiple accounts, a few hundred dollars in each. If one goes down, you still have access to enough money to tide you through until things get sorted out. Don't use Tor while accessing PayPal. If your geographical IP jumps around too much, PayPal will automatically flag your account as potentially compromised and will freeze your funds until you confirm the account with a credit card. Prepaid cards are handy there, but a massive pain in the ass nonetheless.

How you choose to use your donated money is entirely your own choice, but I have no ethical problem with paying for personal projects that have direct benefit to the site. For example, I bought Coda with donated money, and paid for a course in UNIX administration that significantly improved my ability to do my job. I went from absolutely thumb-fingered to only moderately thumb-fingered, and I think the cost was worth it.

Since there is a massive time investment involved in the operation of a torrent site, I wouldn't begrudge you making a profit, either. The excess donations I received would have amounted to something in the ballpark of $1/hr, and I don't think that's unreasonable. However, profiting from the site opens a whole new can of worms. Profiting from copyright violation puts you in different ethical and legal territory. The implication of sale is what landed the EliteTorrents admins in deep shit, and will get you kicked out of Spain, too. As always, it's a personal decision as to where you want your tracker to go, and I decided to take the high road.

TorrentFries, inc.

In the past, I've made a point of steering clear of the legal nuances of tracker-running. The law varies dramatically from jurisdiction to jurisdiction, and more importantly, I know jack shit about legal matters. However, I just thought I'd throw you a tidbit gleaned from one of my lawyer friends: the beauty of a capitalist society.

Basically, in the US, Canada, and the UK, corporations can only be sued for the assets of that corporation. This applies even if that corporation is just you and the assets are zilch. So long as you make it clear that you are always acting on behalf of the corporation, you're out of any legal troubles scott free.

Obviously, the practical implications are a bit more complicated, but that's my understanding, anyway. I invited him to write a guest entry for us, so if he takes me up on that, you'll get to hear a bit more. In the meantime, please take my "legal advice" with all the salt in the Dead Sea.

Write Your Own Disclaimer (in your spare time)

By popular demand, I give you: do-it-yourself disclaimers.

Okay, first I'd like to offer a disclaimer about this post. I'm not a lawyer, and I haven't consulted with one in writing mine. I'm planning to have a lawyer member look over/rewrite our own disclaimer. Well, a member that is ostensibly a lawyer—see my previous comments on judging online character.

Anyway, there are a number of important points to cover. I know Demonoid has 34 pages of text in their disclaimer, which apparently contains some amusing points for those with the attention span to read through it. I guess they figure the length is a deterrent to people actually reading it, but lawyers are renown for their long attention spans. I think it's more important to make your point in a concise manner that your friends can understand as well as your enemies.

Basically, you need to address the following points:

No "uploaded"/copyrighted material is stored on this server. It's not. Only metainfo files (.torrent) are stored on the server, and they only contain SHA1 hashes which describe the material. All material is located on individual users' computers, so you're perfectly safe in making this argument.

Given that part of the disclaimer, for the love of god don't use your server as a seedbox. That'll just increase your culpability in this sort of thing and will make the bit about copyrighted material a total lie. What's more, running it as a seedbox can have all manner of detrimental effects on your server's performance, not just in terms of bandwidth but also drive speed. I know you probably have a 10 or 100 Mbps line with very low utilization, but resist the temptation.

The site cannot be held accountable for the behavior of its users. It is merely offers an indexing service. It's true. You can make the analogy to Google potentially indexing child pornography sites, but that's a little extreme. The point is that you merely provide a service.

It is the responsibility of the users to ensure that they hold the copyright or attain proper permission prior to uploading material. You may want to hide this statement a little, since some members will inevitably take it to heart. I've definitely had some concerned posts to that effect, to which I've given some rather tongue-in-cheek responses. Obviously, the idea is to turn one big fish into a whole lot of little fishies, reducing your own culpability without greatly affecting the masses.

Finally, you will comply with any and all formal copyright notices sent from the proper jurisdiction (where your host is located, since they shouldn't know where you are personally located). Obviously, you're not hosted in the US... are you? The idea is to make a hell of a lot of work for anyone that would attack you, encouraging them to go after other sites. You also need to provide a clear email address for copyright complaints. Better that they go whining to you than to your web host, which will always have contact information prominently displayed and will (with some exceptions) likely take you offline if a copyright owner says "boo".

It's doubtful that this will do a whole lot of good, but you never know. Once I get some better legal advice, I'll make another post correcting any glaring mistakes...