Crypto EDU

Peer-to-Peer Networks

  • August 16, 2021
  • Intermediate
  • technology
P2P Networks Delivery (0-00-02-14)

In a peer-to-peer (P2P) network, every connected computer (referred to as a node), has ownership of the data on the network. Rather than being stored on a single central server, information is transferred among all participants, making every node on the network an equal. As each new block of transactions is added to the blockchain, each node verifies that the information is correct. If a malicious node attempts to add false information to add to the blockchain, it will be rejected by the rest of the nodes on the network. 

P2P networks are the basis of blockchain technology, allowing cryptocurrencies to circulate freely without the oversight of a central authority like a bank or a government. They ensure that every node on the network retains a copy of the blockchain, establishing a simple and powerful check of any attempt to alter the record.

Without a centralized architecture, no one owns the data on a P2P platform and no one can exercise total control over the network. This makes P2Ps much more secure than traditional financial systems: Instead of needing to breach only one site, hackers would have to gain control of the majority of the nodes on the network to steal the network’s data.

Why should you care about peer-to-peer networks?

To have crypto, we need blockchains, and to have blockchains, we need P2P networks. The decentralized, distributed architecture of P2Ps ensures that crypto assets cannot be forged or seized and guarantees that the blockchain remains a network of equals.

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