Peer-to-Peer

What is Peer-to-Peer (P2P)?

Peer-to-Peer (P2P) refers to a decentralized network model where participants, or ‘peers,’ share resources and communicate directly with each other without a central coordinating authority. This concept applies to both network structures and trading methods in various contexts.

P2P in Network Context

  1. Decentralized Networks: Each node (peer) in the network acts both as a client and a server, sharing resources like bandwidth or storage.
  2. Resilience: P2P networks are robust, with no single point of failure.
  3. Scalability: Efficiently manages increasing loads by distributing them across numerous peers.

P2P in Trading

  1. Direct Transactions: Involves the exchange of assets (like cryptocurrencies) directly between individuals without intermediaries.
  2. Privacy and Control: Offers enhanced privacy and more control over the terms of the trade.
  3. Flexibility: Allows for a wide range of payment methods and can facilitate bartering of goods and services.

P2P Networks in Blockchain

  • Distributed Ledger Technology: Blockchain is a type of P2P network where transactions are recorded on a distributed ledger.
  • Decentralization: Enhances security and resilience against attacks or censorship.

P2P Trading in Cryptocurrency

  • Platforms: Specialized P2P platforms facilitate direct transactions.
  • : Can be used to automate and secure the trading process.
  • Global Access: Enables global trading without the need for traditional banking infrastructure.

Challenges

  • Network Challenges: In P2P networks, ensuring consistent performance and handling malicious nodes can be complex.
  • Trading Risks: In P2P trading, risks include fraud and the need for dispute resolution mechanisms.