Data hosting on the web

I recently lost my cellphone, and all my contacts with it. I got a new phone (off ebay, no less) and cingular sent me a SIM card so I could preserve my number. But my contacts were all gone. Now I hear about a new service called ZYB.com that will maintain a web backup of your contacts. The idea is that they collect your contact info (via SMS) and store it, and you can retrieve it (again via SMS) on any phone that allows for text messaging.

It's a cool idea: although there are doohickeys you can get to sync your palm/outlook/PC addressbook with a phone, they are usually vendor specific. This is more general, and is aligned with the whole "store your data on the web" philosophy that's all the rage nowadays (mail, calendars, online spreadsheets, ...)

Privacy of course is the issue, especially with contact info, a gold mine of real telephone numbers and often email addresses. ZYB of course makes all the right noises about privacy, but ultimately you have to trust them.

Why must that be ? It can't be that hard to store data encrypted, and decrypt on the fly only when a user provides a pass-phrase ? The problem with SMS specifically is that the user might have to type the pass phrase out in the open, but maybe there's an IPsec equivalent of SMS out there ? And even if there isn't, wouldn't server-side encryption obviate the need to trust a private entity ?

Given how ubiquitous crypto has become, I think I'd need to be convinced why obvious schemes like this can't be used before handing over data to an entity that I have to "trust".

p.s another point that came up in discussion was the lifetime of such a company. What's the guarantee they won't go belly up in a year and sell your data, or worse, lose it ?

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