What is peer-to-peer? Definition and example
Peer-to-Peer or P2P is a network in which computers share data directly with each other without the need of a central server. Peer-to-peer is a feature of, for example, decentralized cryptocurrency blockchains. P2P can complete virtually all blockchain interactions, i.e., without a centralized variable such as a notary, central bank, or store.
Peer-to-peer (P2P) lending involves lending money to businesses or individual people through online services that match borrowers with lenders. P2P lending firms generally offer their services on the Internet, i.e., online.
They typically operate with significantly lower overheads and provide cheaper services than their traditional counterparts.
Peer-to-peer computing network
In a P2P network, each computer is both a file server and client. In computer science, a client is a computer program that sends a request to another program to perform its actions. The server is a program that receives requests from clients and processes them. By processing the client’s request, the client can subsequently execute its actions.
In a peer-to-peer system, every computer in the network is both client and server. Each computer may send requests or respond to requests and process them.
In other words, in a P2P system, there is no central server.
Wikipedia has the following definition of P2P:
“Peer-to-peer (P2P) computing or networking is a distributed application architecture that partitions tasks or workloads between peers.”
“Peers are equally privileged, equipotent participants in the application. They are said to form a peer-to-peer network of nodes.”
A ‘peer‘ is somebody of the same legal status as somebody else. A peer is also an individual who is equal to another person in age, qualifications, abilities, and background. A schoolgirl’s peers, for example, are the other children in her class.
Therefore, the term ‘peer-to-peer’ means ‘equal-to-equal.’ In the context of this article, ‘equal’ refers to a computer.
Peer-to-peer not new
The concept of peer-to-peer networking is not new. Universities and businesses have been utilizing P2P-type architectures for several decades.
Even the Internet, which was originally developed at the end of the 1960s, was a P2P system.
The original ARPANET connected the University of Utah, UCLA, Stanford Research Institute, and UC Santa Barbara using a format of equal computing peers.
A University of Florida article, titled ‘A Brief history of P2P,’ explains:
“The early popular applications of the internet, FTP, and Telnet, were themselves client/server applications but since every host on the Internet could FTP or Telnet to any other host, the usage patterns of the Internet were symmetric.”
“In the early days of minicomputers and mainframes, the servers even acted as clients as well.”
Bitcoin was the first cryptocurrency to come onto the market. It went into circulation in 2009. It was also the world’s first P2P currency.
Bitcoin and other cryptocurrencies circumvent central banks. Cryptocurrencies offer a decentralized payment system.
A cryptocurrency is a type of digital currency, i.e., a currency that exists purely in electronic form. It is an online currency that uses cryptography.
Cryptography is the art of creating codes and also solving codes.
Cryptocurrencies use distributed ledger technology in the form of blockchains. A blockchain is a list of records (blocks) that is forever expanding. The blocks appear in the blockchain in chronological order.
In a blockchain system, rather than having a central block that holds all the data, each block has all the data. That is why it is so hard to carry out a successful cyber attack on a blockchain.
With a blockchain, a successful hacker would need to attack every block simultaneously. If there are thousands of them, it would be virtually impossible.
Peer-to-peer systems such as blockchains are resistant to manipulation, i.e., they are ultra secure.
Video – What’s a peer-to-peer system?
In this Internet-Class video, Geoffrey Challen explains the difference between a peer-to-peer system and a centralized system with a server and many clients.
Challen shows us why it is much more difficult for the music industry to monitor pirating when there are P2P networks. Challen is Assistant Professor in Computer Science and Engineering at the University of Buffalo.