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Peer-to-Peer Network Explained

2022-12-07 11:56:04

What is a Peer-to-Peer network?

A peer-to-peer network is an interconnection of two or more computers (devices) primarily aimed at sharing resources in a decentralized way. Peer-to-peer networks allow two or more computers to share resources and files directly among themselves without the use of a central server.

Peers are equally privileged network participants in P2P networks because there are no central administrators or regulatory bodies. In a peer-to-peer network model, all peers share the same power and responsibilities. Each peer in a peer-to-peer (P2P) network performs the roles of both a client and a server. The peers in the network system send and receive resources.

The peer-to-peer network model went mainstream when implemented by an American college student named Shawn Fanning in June 1999. Shawn developed a music-sharing service called Napster. A centralized index server facilitated by Napster, users can search for music based on the song title or the artist's name.

what is peer-to-peer network

How does a Peer-to-Peer network work?

A peer-to-peer network is built on the idea that equal peer nodes can serve as both "clients" and "servers" to other nodes simultaneously. This network configuration model is distinct from the client-server model, in which communication typically goes to and from a central server. 

P2P networks are more robust due to their decentralized structure, which eliminates the potential single point of failure that comes with client-server-based systems. The system's overall capacity grows as more peers (nodes) are added, increasing demand on the system and lowering the likelihood of failure. The network is not compromised or harmed if one peer is unable to operate correctly. 

In contrast, clients in a typical client-server model do not share their resources with the system; only their demands are shared. In this scenario, as more users sign up for the system, fewer resources are available to support each user, and the network is brought to a halt if the central server goes down.

What is a key characteristic of the peer-to-peer networking model?

Decentralization is a characteristic of the peer-to-peer (P2P) networking model that has revolutionized the way people share data, resources, and services. Decentralization makes it possible for users to interact directly with one another, without the need for a central server or database. This model has many advantages, including increased privacy, lower costs, and improved reliability.


In a decentralized system, the network is distributed across multiple computers, and each node is responsible for maintaining its own data. This means that no single node can be taken down or compromised, as the data is stored in multiple locations. This also makes it more difficult for hackers to access information, as they would need to gain access to every node in the network in order to do so.

Decentralization also makes it easier for users to connect to one another and share resources. This makes it ideal for applications such as file sharing, streaming audio and video, and online gaming. The P2P model also allows users to access data from anywhere in the world, and to benefit from a variety of services and applications.

What is a peer-to-peer network in blockchain?

The blockchain is powered by a peer-to-peer network and cryptography. Bitcoin, the first application of blockchain, was defined as “a peer-to-peer payment network that operates on a cryptographic protocol.” The Bitcoin blockchain network protocol enables peers (nodes) to maintain the peer-to-peer network, share resources and validate blocks of transactions. 

No centralized authority manages a blockchain peer-to-peer network, and only the peers can validate transactions. This enhances transparency and trust without relying on a central authority or third party that is always prone to corruption.

Peers in the Bitcoin blockchain operate under a consensus called the “proof-of-work” consensus. A consensus is a form of agreement in which peers operate in a peer-to-peer network. The peers protect the network by verifying blocks of transactions and adding them to the blockchain. These peers (nodes) are also known as miners. 

Blockchain miners solve some cryptographic computations, and the first miner to get the answer to this problem gets rewarded with Bitcoin. Other miners then verify the transaction block and the block of transactions is then added to the blockchain network. 

Blockchain data is decentralized, this is made possible with peer-to-peer model implementation. Blockchain data is not stored in a centralized location. Blockchain data is stored in the network's nodes (peers) or computers. Each node has a copy of the blockchain data, which consists primarily of transactions performed on the blockchain network. As a result, the system is supported by every node in the network.

peer-to-peer network in blockchain

Peer-to-peer network advantages and disadvantages


  • P2P networks make transactions more accessible, portable and under the complete control of their users
  • In P2P networks, such as Bitcoin, transaction fees are relatively inexpensive compared to our conventional third-party money transfers
  • Easy and relatively fast file sharing. An advanced peer-to-peer network can quickly share files over long distances.
  • P2P networks are decentralized, decentralization is made possible through distributed ledgers, and this makes the recorded transaction transparent, secure, and tamper-proof. 
  • The failure of one computer or peer won't disrupt the rest of the system
  • The P2P network model doesn’t require a server, therefore there is no additional cost of maintaining a server


  • Files and folders cannot be centrally backed up
  • Since there’s no central authority in the network system, there is no regulation
  • Fraudulent transactions can be made via a P2P money transfer (blockchain), and money can also be laundered
  • Most P2P networks suffer from scalability due to consensus, network upgrades are difficult to do
  • P2P networks such as Bitcoin which uses proof-of-work consensus consume too much energy in validating transactions
  • Most P2P networks are not interoperable, so it is difficult for blockchains to share resources.
P2P network advantages and disadvantages

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