What are Peer-to-Peer Networks?
Peer-to-peer (P2P) networks are decentralized networks containing interconnected computers. Computers in a P2P network are called peers or nodes. All peers have the same capabilities and can act as servers or clients simultaneously. All transfers take place between two or more peers without any central server.
When a peer functions as a client, it downloads data from other peers; and when it operates as a server, it becomes the source of data for other peers. The data can be in different forms such as processing power, printer or scanner access, media files, and blockchain data.
P2P Network Types
P2P networks by design can be of three types.
- Unstructured P2P networks – As the name suggests, these networks have no order or structural arrangement. All peers in this type of P2P network are connected randomly. These are the most common type of P2P networks because they are very easy to set up. The random structure allows these networks to sustain a higher number of connections. The downside to the random nature of these networks is that finding data can be relatively difficult.
- Structured P2P networks – Structured networks are designed in such a way as to maxmize the performance of the network. It’s easier to find and retrieve resources in structured networks. These networks rely on the hash table functions that help attach files to particular users. Structured P2P networks make peers remember who performs what function and has what data.
- Hybrid P2P networks – These networks integrate the convectional server-client and P2P architecture. In hybrid P2P networks, a central server helps organize the nodes to effectively connect with other nodes. Hybrid P2P servers do not store or provide data, they only facilitate the connection to other peers.
Blockchains and P2P Networks
Peer-to-Peer networks are a central feature of blockchain technology. The blockchains themselves are not stored on any central server but instead are spread between all the nodes on the networks. After meeting the required computational requirements, anyone can start participating in the network as a node. For instance, you can set up a new Bitcoin node by just installing the Bitcoin Core software.
P2P networks make blockchain technology decentralised and egalitarian. Due to these networks, we can establish a trustless mechanism without any central authority or entity.
The nodes are usually spread around the globe. Blockchain technology also relies on P2P networks to conduct cryptocurrency transactions without any central server or authority.
Benefits and limitations of P2P Networks
P2P networks provide better, privacy and network effectiveness. They make the whole operation scalable and cost-effective along with providing more strength to withstand failures. There are also some limitations of these networks such as complex management, slow speeds and relatively more computational power requirement.
IF you want to learn more about blockchain technology then read this explainer on different blockchain layers.
Suleman is a part-time crypto writer and full-time book addict. He holds a master’s degree in Chemical Engineering. Nothing excites Suleman like a well-organized fundamental analysis for long-term investment.