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What are Peer-to-Peer (P2P) Networks?

Updated on :  

08 min read.

Peer-to-peer (P2P) networks were first deployed in the 1980s for business purposes. But when a college student named Shawn Fanning developed a music-sharing service called Napster in 1999, the general public learned about this concept. 

But Napster went down two years later to lawmakers because of a lawsuit from the American music industry. This resulted in a new generation of peer-to-peer services willing to fill the void further and help develop decentralised networks. 

Today, the P2P model has uses in several areas. This article discusses the various vital aspects related to P2P networks.

Let’s find out more.

Peer-to-Peer (P2P) networks: Definition

A P2P or peer-to-peer network is a decentralised communication model between two peers, also called nodes, which can communicate without any requirement of a central server. 

Unlike the client/server or seeder/leecher model, in which a seeder makes a request and the leecher fulfils it, the peer-to-peer network model enables every party to function as both seeder and leecher. This implies that after the formation of the network takes place, it can be utilised by the participants to store and share files without an intermediary’s help.

Working of P2P networks

A distributed network of computers maintains a peer-to-peer model. This implies that the computers do not have a central administrator or server as every node holds a copy of the files — acting as both a client and a server. Hence, every node can download files from other nodes or upload files for them. Rather than a central server, these nodes use their hard drives for their data storage. 

Since every node has common abilities to transmit, receive and store files, peer-to-peer networks are more efficient and faster. Unlike traditional architectures, where there is a single point of failure, a peer-to-peer network comes with a distributed architecture that makes it highly resistant to cyberattacks.

Types of Peer-To-Peer networks

P2P networks can be classified as per their architectural differences. These are the three major categories:

  • Structured P2P networks

The structured peer-to-peer networks are organised to enable nodes to search efficiently even if there isn’t a wide availability of data. 

In most cases, such networks implement a DHT (distributed hash table), which allows nodes to search for data by using hash functions. Structured networks can efficiently route traffic but need higher maintenance and setup costs. Also, they tend to be more centralised. 

  • Unstructured P2P networks 

In an unstructured peer-to-peer network, the nodes connect and communicate randomly. As nodes can frequently join and leave the network, these systems are suitable for high churn activity. 

For instance, a social platform on an unstructured peer-to-peer network can use efficiently since users can frequently join or leave the network.

It is easy to build these networks, but they need high memory and CPU usage because search queries are sent to the complete network. Therefore, if what you are searching for is present in only 5% of the computers, then it may take a while. 

  • Hybrid P2P Networks 

A hybrid P2P network combines a client/server and a P2P model on a single platform. The network uses an index server consisting of data on the locations of resources at the centre. It also utilises this server for searches. 

The centralisation functionality that a structured network offers and the node equality that an unstructured network provides make trade-offs on the hybrid network. 

Comparatively, this network type delivers better performance than its counterparts as some search queries require a centralised functionality but can benefit from the decentralised networks simultaneously.

Advantages of P2P networks

  • Cost

Peer-to-peer networks are significantly cost-effective, as costs are distributed and do not aggregate around a centralised authority. Also, such networks are highly efficient and scalable because of the multiple roles of each node. 

  • Consensus mechanisms

This fundamental consensus aspect of P2P blockchains lowers the risk of data alteration or amendment.

  • Privacy

Peer-to-peer networks are more privacy-friendly in comparison to centralised networks. This is because there is no requirement for a central authority to access or store user data.

  • Scalability

Peer-to-peer networks are engineered to be scalable. Every peer or node can be a server, avoiding bottlenecks in centralised systems when there is an increase in the number of clients. With a peer-to-peer network, a hike in the number of clients implies an equal rise in the number of servers.

  • Improved network efficiency

In peer-to-peer networks, every node takes part in the forwarding and routing of data. This can enhance network efficiency, as there is no requirement for dedicated servers or routers.

  • Resilience to failure

In comparison to centralised networks, peer-to-peer networks are more resilient to failure. This is because the loss of a single node does not cripple the whole network.

Limitations of P2P networks

  • More challenging to manage

It is more challenging to manage P2P networks than centralised networks as there is no central authority responsible for network operations. 

For instance, if viruses permeate the system from multiple nodes, peer-to-peer networks can become vulnerable to malware attacks. Also, the decentralised framework makes monitoring or controlling illegal transactions and prohibited activities more challenging.

  • Computational power

With reference to PoW (Proof-of-Work) blockchains, the huge computational power necessary to update information on some networks proves to be a cause for environmental concern.

  • Slower speeds

The peer-to-peer networks are slower than centralised networks because of the high number of hops necessary to reach all nodes. Hops refer to a packet of data’s movements from one network segment to the next.

P2P has become the underlying technology of several applications and services owing to its decentralised, secure and reliable framework. In recent times, online marketplaces, open-source software and file-sharing applications use peer-to-peer networks. 

Cryptos and their distributed ledger technology are remarkable illustrations of the peer-to-peer model, offering improved transparency and security in the financial space. And with the advent of peer-to-peer cryptocurrency exchanges, such developments have reached the next step.

Notably, the cryptocurrency space has transformed into a decentralised network using peer-to-peer blockchain technology.