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I have used firepad as well as other online collaborative text editors extensively, and believe it to be the best one on the market. Go Firebase!

Isn’t Firebase an externally hosted database-as-a-service? Seems like a no-go for me in post-Snowden times.

It depends what you're doing with it. If, for example, you're collaborating together on an open-source project then I don't see any problem.