A decentralized network or system where individuals can interact, communicate, or transact directly with each other without the need for intermediaries, such as banks, corporations, or central servers. P2P networks are often based on distributed architectures where each participant (or peer) acts both as a client and a server, sharing resources and information with other peers.
P2P is commonly used in various contexts, including:
- File sharing: P2P file-sharing networks, such as BitTorrent, allow users to share and download files (e.g., music, movies, and software) directly from other users on the network. This can enable faster downloads and more efficient bandwidth use compared to traditional client-server models.
- Cryptocurrencies: Many cryptocurrencies, like Bitcoin, are based on P2P technology. In these systems, users can transact directly with each other, and a decentralized network of computers (or nodes) maintains a shared ledger of all transactions.
- Lending: P2P lending platforms connect borrowers and lenders directly, often offering lower interest rates for borrowers and higher returns for lenders than traditional financial institutions.
- Communication: Some communication platforms, such as Skype, initially used P2P technology to establish direct connections between users for voice and video calls, reducing the need for centralized servers.
While P2P networks offer numerous advantages, such as increased privacy, reduced costs, and resilience against failures, they also come with challenges, including potential security risks, copyright infringement issues, and regulatory concerns.
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