From Clay Shirky’s “File-sharing Goes Social“:
The RIAA has taken us on a tour of networking strategies in the last few years, by constantly changing the environment file-sharing systems operate in. In hostile environments, organisms often adapt to become less energetic but harder to kill, and so it is now. With the RIAA’s waves of legal attacks driving experimentation with decentralized file-sharing tools, file-sharing networks have progressively traded efficiency for resistance to legal attack. …
There are several activities that are both illegal and popular, and these suffer from what economists call high transaction costs. Buying marijuana involves considerably more work than buying roses, in part because every transaction involves risk for both parties, and in part because neither party can rely on the courts for redress from unfair transactions. As a result, the market for marijuana today (or NYC tattoo artists in the 1980s, or gin in the 1920s, etc) involves trusted intermediaries who broker introductions.
These intermediaries act as a kind of social Visa system; in the same way a credit card issuer has a relationship with both buyer and seller, and an incentive to see that transactions go well, an introducer in an illegal transaction has an incentive to make sure that neither side defects from the transaction. And all parties, of course, have an incentive to avoid detection. …
There are many ways to move to such membrane-bounded systems, of course, including retrofitting existing networks to allow sub-groups with controlled membership (possibly using email white-list or IM buddy-list tools); adopting any of the current peer-to-peer tools designed for secure collaboration (e.g. Groove, Shinkuro, WASTE etc); or even going to physical distribution. As Andrew Odlyzko has pointed out, sending disks through the mail can move enough bits in a 24 hour period to qualify as broadband, and there are now file-sharing networks whose members simply snail mail one another mountable drives of music. …
The disadvantage of social sharing is simple — limited membership means fewer files. The advantage is equally simple — a socially bounded system is more effective than nothing, and safer than Kazaa. …