What is a Peer-2-Peer Network?
When two PCs share files or resources without requiring a separate server, or server software, it is called a Peer-2-Peer (P2P) network. To have access rights in the P2P environment you are governed by setting sharing permissions on individual machines. Peer-to-peer is a very important part of how blockchain technology works, and why it is so solid and secure.
By using a full node (Nodes which are fully verify and meet all the rules.) the whole blockchain is copied onto a single device such as a computer, phone, or a printer. Every computer acts as a server and has nodes for sharing files within the group. These files are stored on these computers and not on one single server.
www.technopedia.com gives a definition of what a Peer-to-Peer network is:
“A peer-to-peer (P2P) network is a group of computers, each of which acts as a node for sharing files within the group. Instead of having a central server to act as a shared drive, each computer acts as the server for the files stored upon it. When a P2P network is established over the Internet, a central server can be used to index files, or a distributed network can be established where the sharing of files is split between all the users in the network that are storing a given file.”
Peer-to-Peer file sharing is also called a peer-to-peer network of nodes. These nodes are connected with links. It is extremely difficult to change or remove it. When someone wants to add on the blockchain ledger, participants run algorithms to evaluate and verify the proposed transaction. If a majority of nodes agree that the transaction looks valid - then the new transaction will be approved and a new block added to the chain. The size of a block is 1MB and can store around 500 transactions.
Bitcoin is a peer to peer electronic cash system. It was the very first decentralized cryptocurrency based technology on the blockchain. Bitcoin is digital coins that can be sent through the internet without needing to go through a central authority, such as a bank. You don’t need a credit card to send bitcoins. All you have to have is a wallet. There are many different types of wallets which you can use, depending on the type of device you have.
This method makes it easy to trade and make payments on a global scale, which is cheaper. The Ethereum blockchain is very similar to Bitcoin. Both of them are in a public peer-to-peer network, or blockchain. Ethereum has its own cryptocurrency which is called Ether. Bitcoin and Ethereum make use of peer-to-peer currency. There is no central authority which can tract the transaction. The network manages these tasks.
The benefits or advantages of P2P payments is the convenience, speed, and ease-of-use. This means that the transactions fees are low and fast.