Libox is aiming to do the impossible: The Tel Aviv, Israel-based startup wants to help people manage their digital media collections by making any media file — be it a picture, song, or high-definition video — available across multiple devices, as well simplifying the age-old problem of sharing media files with friends. And, to make things even more complex, the company wants to do this for free, with no file sharing limits.

After working on the problem for two years, Libox is launching today a public beta of its service for anyone to try. Having used the service for several days now, I can attest that it works as advertised.

The core of the Libox service is an attractive application that runs on Windows PCs and Macs. You can add any media files you like to the software’s library. Once there, it’s instantly accessible from any other computer running Libox’s software, or via Libox’s web-based interface (which also offers a mobile-optimized version for smartphones). You can easily share any files in your Libox media library with friends on the service.

Your files are never uploaded to any servers. Instead, they’re initially streamed directly from the computer that first uploaded the file, and then streamed from any subsequent devices that access the file. Libox describes its technology as “a patent-pending combination of distributed, grid and peer-to-peer networking technologies along with highly sophisticated analytic algorithms.” The service basically creates private clouds between devices with Libox’s software — which allows Libox to share the burden of storing and sending files across multiple devices. Because of this unique networking technology, Libox is able to offer free and unlimited media sharing, as well as complete privacy for users.

The company also puts an emphasis on quality — any file that you share will be made available in its highest quality whenever possible. Libox’s service automatically optimizes the size and resolution of the media depending on the device accessing it. When offline, Libox allows users to view content they’ve already streamed from the service. Users can also download individual files directly to their hard drives, as well. Currently, Libox can handle pretty much any media file format you throw at it, including popular video formats like Matroska, Divx, and Xvid.

Libox plans to monetize by partnering with content companies to deliver media via its service. For example, it would be a great way for movie studios to make high-quality movie trailers available to consumers in a distributed fashion. The company is also planning to release its open API later this year, which would allow developers to release apps using its platform. Android, iPhone, and iPad Libox apps are expected later this summer (those devices can still view content via the web interface).

The company was founded by entrepreneur and engineer Erez Pilosof, who previously founded Walla!, Israel’s largest web portal. Oren Nauman, formerly CEO of Mobival, serves as Libox’s deputy CEO. Thus far, the company has received over $2 million in seed funding by Israeli firms Evergreen Venture Partners and Rhodium.