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The big thing is each individual user would then be responsible for maintaining their own individual cloud. Otherwise, they'll just outsource that out and we're no better than before.

How do you get grandma on her own personal cloud?

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You probably don't. You also don't get grandma to run her own power plant, telephone switching network, etc. As long as her "stuff" is portable, it really doesn't matter who provides the service

If her "stuff" is that portable and the service provider has at least some kind of read access, how would one prevent the service provider from simply keeping a mirror of Grandma's data on their own servers?

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