Beginners Guide

Peer-to-Peer (P2P) Network, The Complete Guide

Author: Qadir AK

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Qadir Ak is the founder of Coinpedia. He has over a decade of experience writing about technology and has been covering the blockchain and cryptocurrency space since 2010. He has also interviewed a few prominent experts within the cryptocurrency space.

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Sharing information and resources is an important part of information technology. A peer-to-peer (P2P) network could help your business grow more efficiently by improving the connectivity and access to shared resources. 

A peer-to-peer network is a platform in which two or more computer systems connect in order to share resources.

In this article, we will provide you the complete guide on the peer-to-peer (P2P) network and its overall aspects, Let us look into this review in detail now.

What is the P2P network?

A peer to peer (P2P) network generally refers to a group of devices that store and share files. Each participant or node here acts as an individual peer. Usually, all nodes perform the same tasks and have equal power.

In terms of financial technology, the word peer-to-peer usually refers to the exchange of cryptocurrencies or digital assets through a distributed network. Without any intermediaries involved, A P2P platform allows the buyers and sellers to execute trades. Also, some websites grant a P2P environment that connects lenders and borrowers. 

How does P2P network work?

With no central administrator or server, A P2P system is usually maintained by a distributed network of users. This is because each node holds a copy of the files which acts both as a client and as a server to other nodes.

In the traditional client-server systems, client devices download files from a centralized server. Whereas each node can download files from other nodes or upload files to them in P2P networks. Here, the connected devices share files that are stored on their hard drives. Using software applications, users can query other devices on the network to find and download files.

Once a user has downloaded a given file, they can then act as a source of that file. P2P networks tend to be faster and more efficient as every node stores, transmits, and receives files. Also, P2P systems are very resistant to cyberattacks due to their distributed architecture. Unlike traditional models, P2P networks do not have a single point of failure.

P2P network Types

1) Unstructured P2P networks

The unstructured P2P networks are comparatively easier to build. Since the search queries are sent out to the highest number of peers possible, they may require higher CPU and memory usage. This, in turn, tends to flood the network with queries.

These systems are resistant to high churn rates. Churn means the number of users joining and leaving the network. The lack of structure can make it difficult for users to find rare content.

2) Structured P2P networks

The structured P2P networks provide a specific organized architecture. It allows the nodes to efficiently search for files. These are not easy to build when compared to the unstructured P2P networks. These systems are less resistant to high churn rates.

3) Hybrid P2P networks

Hybrid P2P networks merge the conventional client-server model with some aspects of the peer-to-peer architecture. There are wide varieties of hybrid networks. Hybrid models tend to present improved overall performance when compared to the other two types.

P2P network Applications

1) File sharing: File sharing is the process of providing the files and giving access for the users to download over the internet. File sharing makes use of the Peer-to-peer network model, where the personal computers of the users are regarded as the peers in the network. Peer-to-peer file sharing differs from file trading in that downloading files from a peer-to-peer network does not require uploading.

2) Bioinformatics: Peer-to-peer networks have also started to grab attention from various scientists, especially those working with large datasets such as bioinformatics. Peer-to-peer networks can be used to run large programs that handle large amounts of data. For example, tests to identify drug candidates. This is possible since peer-to-peer networks scale well.

3) Artificial intelligence: Swarm intelligence (SI) is an artificial intelligence technique based around the study of collective behavior in decentralized, self-organized systems. A peer-to-peer network can be used to build the swarm intelligence where each peer in the network refers to a single agent.

4) Grid computing: Grid computing is a rising computer model that gives the ability to perform high throughput computing. Usually through the Internet to solve large-scale computation problems, Grids use the resources of many separate computers (peers) connected by a network. Grids provide the ability to perform computations on large data sets, by breaking them down into many smaller ones.

P2P network Limitations

The use of P2P networks on blockchains also poses some of the limitations. Adding transactions to a blockchain requires a massive amount of computing power. This is because distributed ledgers must be updated on every single node instead of on a central server.

This provides good security but it greatly limits efficiency. This is one of the major obstacles when it comes to scalability and widespread adoption. Some of the notable examples include the Ethereum Plasma, Lightning Network, and the Mimblewimble protocol.

During hard fork events, the attacks that may take place is another potential limitation. The groups of nodes are free to copy and modify the code and split away from the main chain to form a new, parallel network. Both chains may become vulnerable to replay attacks if the required security methods are not adopted properly.

In addition, The distributed nature of P2P networks makes them relatively difficult to control and regulate. Several P2P applications and companies got involved with illegal activities and copyright infringements.


Peer-to-peer architecture is at the core of the blockchains that make cryptocurrencies possible. It can be developed and used in many different ways. By distributing transaction ledgers across large networks of nodes, P2P architecture offers security, censorship resistance, and decentralization.

P2P systems find their extensive applications in blockchain technology. Ranging from file-sharing networks to energy trading platforms, P2P systems can also serve other distributed computing applications.

Peer-to-peer computing is an emerging technology that is continuously evolving and finding new applications. It is believed that the technology will be increasingly important as new areas adopt it.

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