By Larry Wright
During the early days of the internet, we had linked computers even though we didn’t have the benefit of satellite science to support us. It is how the concept of ‘peer-to-peer’ arose in its original form.
Peer-to-Peer (P2P) networks are essentially a method of transferring information from one computer device to another. However, with the introduction of satellite internet, this concept has moved to a far higher level of sophistication. It is no longer necessary to have a network of connected computers, and the sharing has effectively become wireless.
What is a Peer-to-Peer (P2P) Network?
A peer-to-peer network is a type of computer network that consists of a collection of devices that store and distribute files on a shared network. Each participant (node) serves as an individual peer to the other participants. In most cases, all nodes have the same amount of power and execute the same functions.
In the field of financial technology, the word “peer-to-peer” means the exchange of digital assets or cryptocurrencies among individuals who are connected through a dispersed network.
P2P platforms allow sellers and buyers to complete trades directly with each other, eliminating the need for third-party intermediaries. A P2P environment, where lenders and borrowers can connect with one another, may also be provided via websites in some instances.
Peer-to-Peer architecture can be used for a variety of applications, but it gained widespread popularity in the 1990s. In that decade, the first file-sharing systems were developed, and it continues to be popular today.
Today, peer-to-peer networks (P2P networks) are at the heart of most cryptocurrencies, accounting for a significant percentage of the blockchain sector. However, they are also used in a variety of other distributed computing applications, such as web search engines, online marketplaces, streaming platforms, and the IPFS (InterPlanetary File System) web protocol, to name a few examples.
A peer-to-peer network (P2P) differs from the standard client-server network used in networking. A client and server network is a link established between a computer (client) and a server computer in order to give the client access to the server’s computing resources.
In a peer-to-peer network, each device or computer is considered a peer, hence the term “peer-to-peer,” and each device has functions that make a contribution to the network’s overall operation. Each computer serves as both a client and the server, and it shares resources with other computers connected to a network.
Characteristics of Peer-to-Peer Network
Some of the most important characteristics of the peer-to-peer network are as follows:
Each computer in a peer-to-peer network contributes resources to the system network while also consuming resources that the network makes available. Resource sharing allows multiple computers in a network to share resources such as printers, files, storage, bandwidth, and processing power.
It is simple to set up a peer-to-peer network. Following installation, access is regulated by configuring the sharing authorization on each device in the network. Passwords can be assigned to specific resources in order to restrict access to those resources.
In some cases, a peer-to-peer network is built by layering a virtual network over a physical network. The network transfers data over a physical link, whereas the virtual overlay enables the machines on the network to interact with one another over a virtual network.
How Does Peer-to-Peer System Work?
To put it simply, a Peer – to – peer system is one that is managed by a network of users who are scattered throughout the world. A central server or administrator is not usually required because each node maintains a copy of the data or files and serves as both a client and a server to the other nodes in the network.
As a result, each node has the ability to download data from other nodes and upload data to them. In contrast to more conventional client-server systems, wherein client devices download file types from a centralized server, peer-to-peer networks do not rely on a centralized server.
P2P is a network in which the linked devices distribute files that are kept on their hard disks. Users can search for and download files from other network devices by using software apps that are designed to facilitate the sharing of information. Following the download of a certain file, a user may choose to serve as a source for that particular file.
To put it differently, when a node operates like a client, it is responsible for downloading files from some other network nodes on the network. However, while they are acting as a server device, they act as a source from which all other nodes can get data. In practice, however, both duties can be carried out around the same time if necessary (e.g., uploading file A and downloading file B).
As a result of the fact that every node has the ability to store, transfer, and receive files, peer-to-peer networks tend to become quicker and more accurate as their user base is larger.
Consequently, we can consider a node as having two unique functions to make things simpler. In the first instance, it serves as a client while downloading files from other nodes.
Again, when it is necessary to serve files to other nodes, the node can perform the function of a server. A node may do both the sharing and receiving functions at the same time, which is what makes the Peer-to-Peer network so efficient and speedy. As the network expands in size, it has the tendency to become more efficient.
Furthermore, in contrast to traditional methods, the P2P distributed design is safe and can withstand cyberattacks far more effectively. Because there is no single point of failure in a peer-to-peer network, it is possible to maintain high levels of uptime.
Types of Peer-to-Peer Network
Peer-to-peer systems can be divided into several categories based on their architecture.
- Structured P2P
- Unstructured P2P
- Hybrid P2P
Let’s discuss them one by one to understand each type more clearly.
Structured Peer-to-Peer Network
In this peer-to-peer node configuration, a central server authorizes most of the material posted to the network and then distributed throughout the network.
You will also be able to observe all of the actions that are taking place in the network if you join as a node because they have a very well-organized structure.
Structured Peer-to-Peer (P2P) networks have a well-organized architecture that allows nodes to search for files quickly and efficiently, even if the data is not widely distributed. In the majority of cases, this is accomplished by using hash functions, which make database lookups more convenient.
However, it does not grant equal privileges to all of the nodes involved. Throughout the process, a core individual is in charge of and controls the network.
It is significantly more expensive to operate, but this makes it considerably safer than every peer-to-peer network. Besides that, structured P2P networks are less durable when faced with large churn rates.
Unstructured Peer-to-Peer Network
Unstructured Peer to Peer networks are the polar opposite of structured Peer-to-Peer networks. It is simply a domain that is governed by all of the nodes that are contained within it.
When you are seeking anything, the request is sent to all of the nodes in the network, and you are then linked to the node that contains whatever you are looking for.
The organization is a little chaotic, but every node has the same rights as the others.
Because of the lack of management from a centralized server, it is considered less secure than the other option in comparison. As a result, it has the potential to become a center of malware activity. As a result, use this tool with caution and refrain from downloading everything you see on this network.
Unstructured peer-to-peer networks are simpler to construct may consume more CPU and memory than structured networks since requests are sent over to the greatest number of peers available. It has the effect of flooding the network with inquiries, particularly if only a few nodes provide the needed content.
Hybrid Peer-to-Peer Network
This network is an amalgamation or fusion of the structured and unstructured P2P networks in keeping with its name. It is the most efficient peer-to-peer network currently available. Even though there is a centralized network, the remainder of this P2P network is widely scattered.
Additionally, every node has the same rights as the others, and they can all share and upload data to the network. The organized structure allows you to search for the data you are searching for, and it will provide the most relevant outcomes.
BitTorrent is a very well peer-to-peer network that operates on the hybrid P2P model. Furthermore, the navigation of the approach is significantly easier with such a framework.
With this technology, the results of the search are virtually completely correct. However, there is still the possibility of safety being a concern to consider. As a result, the appropriate decision should be made.
Therefore, hybrid models are more likely to have increased overall performance. They typically incorporate some of the most significant advantages of each strategy, resulting in large increases in both efficiency and decentralization at the same time.
What is the Difference Between Distributed And Decentralized Peer-to-Peer Network?
It’s crucial to remember that, while the P2P design is naturally dispersed, there are variable degrees of centralization within the architecture. As a result, not all peer-to-peer networks are decentralized.
In fact, most of the systems depend on a central authority or body to guide network activities, resulting in a degree of centralization in their operation. For example, certain peer-to-peer (P2P) file-sharing systems also allow users to search for and download content from other users. Yet, they are not able to participate in other operations, such as query management.
A higher degree of centralization can also exist in tiny networks managed by a small user base with common aims, although no proper centralized network infrastructure exists.
What is the Role of P2P In Blockchain?
Satoshi Nakamoto, the creator of Bitcoin, described it as a “Peer-to-Peer Electronic Cash System” in the early phases of the cryptocurrency’s development. Bitcoin was established as an electronic form of money to replace paper money. Through a peer-to-peer network, which maintains a distributed ledger known as the blockchain, it can be moved from one person to another.
Digital currencies may be transmitted around the world without intermediaries or a central server because of the P2P structure intrinsic to blockchain technology, which is discussed further below. In addition, anyone who wishes to participate in the process of verifying and confirming blocks can do so by setting up a Bitcoin node.
As a result, there are no banks involved in the processing or recording Bitcoin transactions. Instead, the blockchain functions as a virtual ledger that keeps track of all activity and makes it available to anybody who wants it.
Essentially, each node maintains a copy of the ledger and matches it to the data held by other nodes to make sure that the information is accurate. The network immediately rejects any harmful action or inaccuracy.
Nodes can play a range of distinct roles in the scope of bitcoin blockchains, depending on their assigned role. For instance, full nodes ensure the network’s security by comparing transactions to the system’s consensus rules before allowing them to proceed.
Each full node maintains a complete, up-to-date copy of the blockchain. It enables them to participate in the communal process of verifying the genuine status of the distributed ledger. The fact that not all validating nodes (full) are miners should be kept in mind.
Advantages of P2P in Blockchain Architecture
Blockchains’ peer-to-peer architecture provides a number of advantageous characteristics. One of the most significant advantages of peer-to-peer networks is that they offer higher security than typical client-server configurations. Because blockchains are distributed across a vast number of nodes, they are virtually impervious to the DoS (Denial-of-Service) attacks that have plagued countless systems in recent years.
A similar point is that, because most of the nodes must reach an agreement before data can be added to a blockchain, it is nearly hard for an intruder to alter the data in the blockchain. It is best suited for large networks such as the Bitcoin network, with over a million users.
The vulnerability of smaller blockchains to attacks arises from the possibility that one individual or group might eventually gain control of most nodes (this event is known as a 51 percent attack).
The dispersed peer-to-peer network and the requirement of a majority consensus provide blockchains with a reasonably high level of resistance to malevolent conduct. Because of the peer-to-peer approach, Bitcoin and other blockchains have been able to attain the Byzantine fault tolerance (also known as scalability).
Aside from providing security, peer-to-peer architecture in bitcoin blockchains also makes them immune to censorship by central authorities, which is an important feature.
On the contrary to traditional bank accounts, bitcoin wallets can’t be frozen or depleted by governments. Additionally, resistance to censorship measures by private money processing and information platforms has been demonstrated. A number of content providers and online businesses have begun accepting bitcoin payments to avoid having their payments banned by third-party payment processors or banks.
Limitation of P2P Network in Blockchain
Despite the numerous benefits they provide, the usage of peer-to-peer networks on blockchains is not without its restrictions.
The fact that distributed ledgers should be updated on each and every node rather than on a single central server means that recording transactions or events to a blockchain needs a significant amount of computer capacity. While this increases security, it has a significant impact on efficiency, and it is one of the most significant barriers to scalability and wide-scale use of blockchain technology.
Cryptographers and blockchain engineers, on the other hand, are looking into alternatives that could be employed as scaling solutions. The Lightning Network, Mimblewimble protocols and Ethereum Plasma are just a few of the many notable instances.
Another potential drawback is the possibility of assaults during hard fork situations. Because most blockchains are decentralized and open-source, nodes can copy and modify the code and branch out from the main chain to build a new, parallel network. Hard forks are very typical and pose no harm in and of themselves. Both chains, however, may be subject to replay attacks if certain security mechanisms are not correctly implemented.
Furthermore, P2P networks, not just in the blockchain space, are difficult to monitor and regulate due to their decentralized nature. Several peer-to-peer (P2P) applications and businesses have been implicated in unlawful activities and intellectual property theft.
Conclusion
This type of architecture may be constructed and used in a variety of ways and is at the heart of the blockchains network that enables cryptocurrencies to exist.
P2P architecture, which distributes transaction ledgers across huge networks of nodes, provides security, censorship resistance and decentralization, and by virtue of its distributed nature.
In addition to being effective in blockchain technology, P2P networks can also be used for a variety of other computational applications, varying from data-sharing networks to gas trading platforms, to name a few.