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KYLE GOODWIN wants his stuff back. One day, he decided to set up a company in Ohio to . For a while, business was good, but then he got a shock.

To keep his valuable footage safe, Goodwin had placed it in a popular storage facility. On 19 January last year, all those assets disappeared without warning. As did everything put there by more than 150 million others. When he asked for his livelihood back, he was refused. So he decided to go to court.

Goodwin鈥檚 experience represents a much deeper problem 鈥� and it is at the heart of the way we use technology today. 鈥淭his is about internet users and the future of internet usage,鈥� says of the (EFF), which is providing Goodwin with legal help. Why? Goodwin鈥檚 video footage was digital, and stored on a computer server in 鈥渢he cloud鈥�. The US government, who confiscated his material, is essentially claiming that the minute he uploaded it.

What鈥檚 at stake affects you because almost everybody online now uses cloud computing in some way, whether it is for webmail, social media or reading ebooks. Clusters of servers thousands of miles away now hold our favourite music, photo memories and vital correspondence. We are headed for a world in which we will live our entire digital lives in the cloud, but these developments are poised to change our basic assumptions about ownership in surprising ways. Are we ready?

The cloud is the result of a pendulum swing in computing. A few decades ago, computer users would typically share a single machine 鈥� a mainframe 鈥� with many others, accessing it over an office or university network from local terminals. CPU time and storage were expensive, so resources were pooled. That ended with the arrival of cheap PCs.

Now the pendulum is swinging back. The difference is that those shared computer resources now sit in vast data centres owned by the likes of Amazon, Google or Microsoft. Yet the greatest trick the cloud鈥檚 creators ever pulled was convincing the world it doesn鈥檛 exist. Half of the participants in a recent survey by Wakefield Research said they did not use the cloud, and yet .

鈥淭he greatest trick the cloud鈥檚 creators ever pulled was convincing the world that it doesn鈥檛 exist鈥�

The cloud鈥檚 influence pervades our digital lives. Amazon alone is thought to own 450,000 servers around the world, providing storage and other services to thousands of websites and businesses, which find it a cheap and convenient alternative to investing in servers of their own. According to one 2012 study, every day a third of US internet users .

The cloud also underpins much of our personal activities, allowing us the convenience of accessing online services and digital possessions from any of our devices. This covers photos, videos we post on social media sites, and correspondence and attachments in webmail services like Gmail or Microsoft鈥檚 Outlook.com. Increasingly, we are also using digital file lockers such as Google Drive, Microsoft鈥檚 Skydrive and Apple鈥檚 iCloud. (see 鈥�No silver lining鈥�).

It is widely thought inevitable that . In this scenario, many of our gadgets would just be dumb, empty objects whose sole job is to access the internet, with all the computing and storage handled at the other end of the line.

This vision makes a lot of people uneasy. Computing pioneer and activist , for example, voiced the concerns of many when he re-dubbed cloud computing 鈥渃areless computing鈥�.

Storing personal possessions with a service offered by third parties like Amazon, Google and Microsoft is like dumping all your stuff in someone else鈥檚 warehouse. But here鈥檚 the rub: service agreements that would be unacceptable for a bricks-and-mortar warehouse have become standard fare for cloud storage. Though you technically retain copyright if you have created the photos, videos or text you upload, the reality is that agreeing to the service terms 鈥� which, let鈥檚 be honest, you probably didn鈥檛 read 鈥� generally means you forego many of the rights you might reasonably expect. For example, the popular photo-sharing app, Instagram, recently changed its terms after it was acquired by Facebook, giving itself a license to use people鈥檚 uploaded photos for advertising.

Further, 鈥� emails that their algorithmic text-crawlers deem potentially illegal or pornographic, for example. And they can lose your stuff with impunity. By contrast, if you want to delete your files, there is no guarantee that they will actually be removed from cloud servers. 鈥淲henever you hand over your property to a third party there鈥檚 risk,鈥� says McSherry, 鈥渂ut people don鈥檛 even realise what the risk is. They do it because it鈥檚 convenient.鈥�

These issues are at the heart of Goodwin鈥檚 legal battle. Like millions of others, he stored his files with a company called Megaupload, an online digital locker. Unfortunately for its legitimate users, Megaupload became better known as a hub for pirated films, games and software. So the FBI took it offline.

Goodwin has . The court is yet to decide, but the US government鈥檚 response is that, in the cloud, Goodwin forfeited his property rights.

While the government鈥檚 defence may sound ridiculous, it is on pretty firm legal ground, says , who works on the legal aspects of cloud computing. 鈥淧ossession, which is sort of what property is all about, is irrelevant,鈥� he says. The problem is that our understanding of property is based on material objects. 鈥淏ut we look at all this digital information and it has no physical existence we can point to.鈥�

After all, a digital file exists as a state of matter (various magnetic states, say) rather than matter itself (the disc on which the magnetism resides). If cloud service providers gave you actual property rights, then there would be hundreds of thousands of owners of the magnetic discs inside the servers on which your information is stored.

In any case, your cloud possessions rarely exist in just one location. For example, if you upload something to the digital locker Dropbox, which uses Amazon鈥檚 servers, it is transferred via your internet service provider (ISP) through multiple way-stations called routers to one of Amazon鈥檚 data centres, most of which are in North America. Once there, your file will be duplicated across multiple servers 鈥� perhaps even split into pieces 鈥� to balance the load and keep people鈥檚 data flowing. There is no way for you to know where it will end up.

What鈥檚 more, if your file has already been uploaded by someone else 鈥� a digital copy of a Radiohead album, for instance 鈥� then Dropbox will just link you to the existing files rather than waste bandwidth and space by uploading a duplicate. Are those files uploaded by that other person now yours? Surely not. Untangling relationships with your possessions in the cloud quickly gets confusing. 鈥淚t鈥檚 a muddle of abstractions,鈥� says , UK.

This is causing tension between our intuitive beliefs about property and the reality that this technology has created. How can we resolve this?

Some have proposed restructuring the basic architecture of the cloud to help bring it closer to traditional notions of property. , who chaired the EFF鈥檚 board of directors until 2010, believes we can keep the cloud while also keeping some of the control we have with personal computing. 鈥淢y hope is to find a happy medium somewhere in between,鈥� he says.

Templeton advocates an idea called the 鈥渄ata deposit box model鈥�. A photo posted on Facebook, for example, would be kept on a web server that you had some control over, which could be a small server in your home, or perhaps a neighbourhood server run co-operatively. The idea is that there would be no quibble about whether you legally own that photo, since it would be stored somewhere akin to a rented apartment or a safety deposit box, rather than on Facebook鈥檚 third-party servers. The image on Facebook鈥檚 pages would then be provided by your local store whenever it was needed.

Templeton thinks such a facility could be provided as part of a package from ISPs. And there are already projects that provide easy-to-use software allowing individuals to run data deposit boxes, such as and . The community of Diaspora users has even grown into its own social network, a mini self-reliant Facebook. The downside is that unless ISPs or the likes of Facebook sign up, the balance Templeton hopes for is unlikely to materialise.

Are there alternatives? Perhaps, but rather than redesigning the cloud, they would involve making it easier for us to navigate and understand its workings.

To get a better handle on these issues, Harper argues that it is important to understand what people feel is missing from their experience of using the cloud. To that end, he and Will Odom at Carnegie Mellon University in Pittsburgh, Pennsylvania, have been studying

For example, one interviewee told them that a collection of photos uploaded to a website was among their most important possessions: 鈥淏ut at the same time, I have no idea how to get them鈥� it feels like there鈥檚 this illusion that they鈥檙e mine鈥� it鈥檚 a very strange feeling that I do not know how to resolve.鈥�

This feeling appears to span generations. In a similar study, , also at Microsoft Research, interviewed teenagers about their use of Facebook. Though the teenagers were initially nonchalant about posting personal photos online, Regan pushed. 鈥淯nderneath there was a real unease about where this stuff was and who owned it,鈥� he says. 鈥淚t was almost as if the unease was so great that people were unwilling to face it, which was a little scary.鈥�

What do these reports tell us in practice? Harper thinks that designing computer interfaces to provide a sense of 鈥済eography鈥� in the cloud would help, giving a way to orient ourselves when rummaging through our digital items. 鈥淧eople like to feel they know where something is,鈥� he says.

An app launched last year called might be a start. This allows you to view and search all your online stuff from Gmail, Dropbox and similar services from a single piece of software on your computer, so you know what your stake in the cloud actually is.

Ultimately, we may need a fundamental redesign of the visual displays we use to navigate in the digital world, says Odom. Fortunately, there is a precedent. Before the desktop interface arrived on personal computers, with its windows and icons, the average computer user couldn鈥檛 picture all the digital files held on their hard drive. In principle, designers could do the same thing for the cloud.

Before that hypothetical cloud interface arrives, many are predicting a cloud 鈥渄oomsday event鈥� in the next few years 鈥� a massive and widespread loss of data, for example. 鈥淭hen people will take notice,鈥� says Reed.

We now face a choice: remake cloud possessions in the image of their material ancestors or give up some of our core beliefs about what it means to own things. While Reed thinks a resolution is possible, it could be 20 years before the legal and social issues are settled. 鈥淚t鈥檚 going to take that period of time. We鈥檙e in that turbulent period where everything is changing,鈥� he says.

This article appeared in print under the headline 鈥淟ost in the clouds鈥�