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You may have heard of the term peer-to-peer (P2P) somewhere but didn’t exactly understand what they are. You might think this is a new technology product.
But no, in essence the concept of a P2P network architecture first appeared in 1969. And the initial use of P2P networks in business was deployed in the early 1980s.
Therefore, in this article, CHK will explain to you what a peer-to-peer (P2P) network is; And what benefits and harm do they bring to the crypto industry?
What is peer-to-peer network?
Peer to Peer (P2P) is a computer system that connects to each other via the Internet, and shares data without the need for a central server. Peer-to-peer computer networks use a distributed (decentralized) architecture.
In other words, a P2P network has no differentiation between server and client.
Peer to peer in the cryptocurrency industry
In the crypto industry, the term P2P is often used to refer to the trading of cryptocurrencies or digital assets through a decentralized network.
P2P in computer science
The P2P concept is applied to many different uses. Not only for file exchange, but also for exchanging information between people. Especially in situations of cooperation between a group of people in a community.
How peer-to-peer networks work?
As mentioned above, peer-to-peer networks do not have servers and clients. Instead each node holds a copy of the files, acting as the client and server for the other nodes.
So in essence, the peer-to-peer network is maintained by a distributed network of users.
On a P2P network, devices use software applications designed to mediate data sharing. When you want to find and download files, users can send search requests to other devices on the network. And once a file is downloaded, they can act as its source.
In other words, when downloading a file from node A, node B acts as the client. When node A downloads a file from node B, node B acts as the server.
Some popular industries / services adopt P2P network
- Cryptocurrencies like: Bitcoin, Ethereum, …
- Loan (P2P Lending)
- Online buying-selling platform
- Share files
- Open-source software
Peer to peer network classification
P2P networks are divided into 3 categories:
The P2P network is unstructured
This is the type of P2P network in which nodes are randomly set. This type of network is resistant to the fact that certain nodes frequently join and leave the network.
However, while they are easier to build than structured P2P networks, they use higher memory and CPU usage. Because when searching for a piece of content, the search request will be transmitted across the network to find as many shares as possible. This leaves the network inundated with search requests.
Besides, unstructured P2P networks cannot guarantee a successful content finding
The P2P network is structured
This is the kind of peer-to-peer network where nodes are built according to a particular structure. Allows the buttons to search for files quickly, even if the content isn’t popular.
In addition, the structured P2P network used the DHT (Distributed Hash Table) system to overcome the possible disadvantages of unsuccessful searching of the unstructured P2P network.
Although highly effective, structured P2P networks have a higher level of centralization. In addition, the cost of setting up and maintenance is also higher.
Hybrid P2P network
This type of P2P network combines a traditional architecture (server and client) with a peer-to-peer structure.
Compared with the two above types of P2P networks, hybrid networks are easier to build. In addition, they inherit all the advantages and performance is also better.
The role of P2P in Blockchain
The peer-to-peer (P2P) network structure in Blockchain is a factor that helps in trading electronic currencies without going through an intermediary.
Therefore, there is no single bank or central server that can control the transactions. Instead, it is using a ledger called Blockchain to publicly record all transactions.
Besides, the buttons will take on different roles. Full nodes, for example, help maintain network security. This is done through verifying transactions according to consensus rules.
Useful features that Peer to Peer brings to the crypto industry
- Byzantine fault tolerance
- There is no need for third party fees
- High security, scalability
- Against government control
- Even if one part of the system fails, the rest is still unaffected
Some limitations of P2P on Blockchain
Since there is no central server, recording transactions to the Blockchain requires a large amount of computational power. This significantly reduces performance; is a major hindering factor in its expansion and widespread adoption.
The nature of peer-to-peer networks is decentralized, so they are difficult to control and regulate in case of investigating crimes such as money laundering … This is in fact both the advantages and disadvantages of the peer-to-peer network.
Besides, when the event took place hard fork (splits a chain into two new parallel chains). Due to the nature of most blockchains, they are decentralized and open source. So if the security is not good, the two networks can be attacked again (Replay Attack)
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