The peer to peer network is defined as a cluster of devices connected together, to form a specific network. Once the network is developed, it can be used for sharing of files as well as for the storage of the same. In any such network, generally all the nodes have an equal amount of power and the same tasks can be used by them.
Role of P2P in Bitcoin and Blockchains
At the core of the Bitcoin technology, peer to peer network has been there for all times. In his paper, the creator of Bitcoin, Satoshi Nakamoto used the term “Peer-to-Peer” himself. A key concept was introduced by Bitcoin – named blockchain – a distributed ledger which is managed by the peer to peer network. There is clearly an association between the working of the blockchain technology and the P2P architecture.
It is easy to say that cryptocurrencies work on the strength of the peer to peer network. This is exactly the reason why virtual currencies can be available in an instant in almost every location around the world online. In order to execute the operation, no centralized server is needed. This is a decentralized architecture – which makes it unique and a refreshing change, although its security can be questioned!
It must be noted that the P2P network definition changes according to the sector that is used in. In case of financial technologies it is a distributed network in which cryptocurrencies or Digital assets can be exchanged by peers.
It lets the peers, meaning buyers and sellers, purchase or sell with no need to go through any intermediary organization. Due to an absence of intermediaries, the P2P network stands out! Different types of P2P platforms or environments link the peers, with no interference to the process itself.
Benefits of P2P Network in Blockchain
Peer to peer networks are of different types:
- Structured Networks for P2p
- Hybrid Networks for P2P
- Unstructured Networks P2P
The P2P architecture provides the blockchain network with plenty of benefits. There is higher amount of security as compared to client server architecture. Data immutability is another important benefit, where it is it possible to alter the data after it is written.
Blockchains can also use this kind of architecture to run independently, with no need for any Central authority censorship.
How do Bitcoin transactions happen on the peer-to-peer network?
Moreover, it is the responsibility of the users to maintain the P2P Networks. As it involves peers only – meaning buyers and sellers, no administrator or central authority is needed.
This indicates that each node has to serve as both server and client – to other nodes that are present on the server. By acting like this, every node operates like a server and has to either upload files to other nodes or download them from other nodes.
Due to this method of working, it stands out from any regular client-server setup out there. In the client-server setup, a centralized server is always present- from which files are downloaded by the client.
Hard drives are used by the nodes for the storage of the files shared. As far as the software is concerned, applications are used to share data or help other devices for processing queries related to downloading or searching for files.
The Future of the P2P Technology in the Blockchain Network
It must be understood that the peer to peer concept is not a new one as it was back in the 1990s when it was used for the first time, for the purpose of sharing files.
Today, the concept is widespread and the peer to peer network is used for torrent downloads as well as for empowering cryptocurrency transactions. You can find P2P networks almost everywhere today on the blockchain network, given that over 2,000 cryptocurrencies available around the world are benefiting from these networks.
When it comes to the use of P2P networks, the blockchain technology has proved to be a front runner. In this network, it is possible for peers to communicate with each other and carry out transactions – with no need for any centralized authority or intermediary.
The blockchain technology is being embraced by more and more traditional financial organizations today, to ensure more security to their operations. Naturally, it can be expected that P2P networks will be used in a more widespread manner in the years to come and accepted as a global standard. Therefore, selecting a right platform is extremely important. For that, 1k daily profit is undoubtedly the best and reliable option.