If the very idea of hacking your phone makes you nervous, there's a safety net -- sort of. When you decide to jailbreak your phone, you do it with the understanding that you could damage it. Phones can be restored to their out-of-the-box state by reinstalling original firmware through iTunes, but only sometimes. Worst-case-scenario and your phone becomes an expensive brick, commonly referred to as an iBrick.
Be forewarned: Jailbreaking is not sanctioned by Apple (that's why it's called jailbreaking). The practice voids the warranty and any new firmware upgrades Apple releases erase any previous jailbreaking efforts (it overwrites them).
Security concerns arise as well. When you buy apps through Apple's App Store, Apple has vetted them. When you download and install unsanctioned third-party apps, you can't be sure what you're getting -- the hottest new way to upload a video to YouTube or a malicious piece of software? You won't know until you install it.
Additionally, according to comments Apple filed with the U.S. Copyright Office in early 2009 as part of the 2009 Digital Millennium Copyright Act (DMCA) triennial rulemaking, jailbreaking an iPhone constitutes a DMCA violation and copyright infringement.
DMCA allows the company to block anything from working on devices they produce without having first approved it. If you download unapproved third-party apps, you're in violation because your phone is no longer under Apple's security controls. And copyright infringement comes into play here because in order to jailbreak an iPhone, someone must first write code that is a tweak of the existing Apple code -- but is reverse engineering fair use or copyright infringement? That's something for the courts to decide.
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