Peer-to-Peer Networks

A Peer to Peer (abbreviated to P2P) network is a very important part of how blockchain technology works, and why it is so solid and secure. Here we will explore what is P2P and why it is such a vast improvement on the centralized systems we are familiar with today.


In a P2P network, the user utilizes and provides the foundation of the network at the same time, although providing the resources is entirely voluntary. Each peer (a “peer” being a computer system on the network) is considered equal and are commonly referred to as nodes. A peer makes a portion of computing resources such as disk storage, processing power or network bandwidth, directly available to other participants without the need for any central coordination by servers or stable hosts.

Despite all nodes being equal, they can take on different roles within the blockchain ecosystem, such as that of a miner or a “full node”. In the case of a full node, the whole blockchain is copied onto a single device, while the device is connected to the network. What this means is that the information stored on a blockchain cannot be lost or destroyed because to do so would mean having to destroy every single full node on the network. Therefore, as long as a single node with a copy of a blockchain exists, all the records will remain intact, providing the possibility to rebuild that network.


Peer to Peer networks completely differ from the traditional client-server models that are common today as there is no central point of storage, such as a server. Instead, information is being constantly recorded and interchanged between all of the participants on the network. This is also different to a centralized server model that slows down when more users join it, as a P2P network can actually improve its power with more devices or nodes joining the network.

This method of transferring information is a huge improvement because data is not held in one centralized point, making it far less vulnerable to being hacked, exploited or lost.

No central point of storage means there is no need for a dominant authority and therefore no single party can control and use the network to push its own agenda. Instead, the user becomes the true owner of their personal data, as long as they secure it properly. This is a bold step away from the centralized systems of today, wherein a social network becomes the owner of all the data that the user uploads or a company that provides payment systems deciding when you can access your own funds, reserving the right to freeze your money whenever they see fit.

The P2P architecture was originally brought into mainstream use by the file sharing application Napster in 1999, where files such as music or film were stored across multiple computers. A simple example would be a user wanting to download an album. Each “peer” on the network would send the downloader a portion of the album, say a single song for example. At the same time the downloader would also be uploading the files that they are receiving, or have already received, to other parties who were also downloading the album. This was illegal as it distributed pirated copies of copyrighted content, however it was very popular and undeniably effective in doing so.

The emergence of the P2P network and the central role it plays within blockchain technology could be seen as welcoming a new system of communication. With blockchain trust in all powerful third parties is no longer need as users can rather deal directly with one another across a secure and distributed and decentralized network.

Despite the participation of each peer on the network being open to viewing, all information and identities of participants are entirely concealed on a blockchain through highly complex, state of the art cryptography


Lesson 7

A lot of people use cryptography on a daily basis without giving it a second thought as many popular messaging apps use encryption. It is also one of the core aspects of blockchain technology. In this lesson we will provide a simple yet detailed explanation of cryptography, both symmetric and asymmetric key cryptography.