What is peer-to-peer (P2P)?
In computer science, a peer-to-peer (P2P) network consists of a group of devices that collectively store and share files. Each participant (node) acts as an individual peer. Typically, all nodes have equal power and perform the same tasks.
In financial technology, the term peer-to-peer usually refers to the exchange of cryptocurrencies or digital assets via a distributed network. A P2P platform allows buyers and sellers to execute trades without the need for intermediaries. In some cases, websites may also provide a P2P environment that connects lenders and borrowers.
P2P architecture can be suitable for various use cases, but it became particularly popular in the 1990s when the first file-sharing programs were created. Today, P2P networks are at the core of most cryptocurrencies, making up a great portion of the blockchain industry. However, they are also leveraged in other distributed computing applications, including web search engines, streaming platforms, online marketplaces, and the InterPlanetary File System (IPFS) web protocol.