Peer-to-Peer (P2P)

Understanding Peer-to-Peer (P2P) Networks

A Peer-to-Peer (P2P) network is a distributed network where computer systems communicate with each other to share data or tasks. Unlike traditional networks, P2P networks do not require a central server to facilitate and manage communication.

In a P2P network, all peers are considered equal and have the same privileges. To access a P2P system, all that is needed is an internet connection and a copy of the software or protocol used. Peers or nodes in the network make their resources available to others without the need for a central server to process requests and manage resources.

P2P networks have gained special significance in the context of cryptocurrencies and blockchain technology. For example, Bitcoin’s whitepaper describes its protocol as “A Peer-to-Peer Electronic Cash System,” highlighting the equal involvement of all participants without the need for intermediaries. In a blockchain network, all peers or nodes have a copy of the records of accounts and transaction history. However, miners and other full nodes who contribute processing power to the network have a more complete copy of the records.

It is important to note that P2P networks are not limited to blockchain-based systems. BitTorrent, for example, is one of the largest decentralized P2P systems and was not originally blockchain-based (before Tron acquisition).