⫸Smart Talk⫷ (04): What is P2P?
𝑾𝒆𝒃-𝒔𝒂𝒗𝒗𝒚 𝒑𝒊𝒆𝒄𝒆 𝒊𝒏 𝒐𝒖𝒓 𝒌𝒏𝒐𝒘𝒍𝒆𝒅𝒈𝒆-𝒃𝒂𝒔𝒆𝒅 𝒆𝒄𝒐𝒏𝒐𝒎𝒚
𝘋𝘰 𝘺𝘰𝘶 𝘬𝘯𝘰𝘸 𝘵𝘩𝘢𝘵 𝘵𝘩𝘦 𝘚𝘵𝘢𝘵𝘶𝘦 𝘰𝘧 𝘓𝘪𝘣𝘦𝘳𝘵𝘺 𝘪𝘴 𝘢 𝘭𝘪𝘷𝘪𝘯𝘨 𝘦𝘹𝘢𝘮𝘱𝘭𝘦 𝘰𝘧 𝘤𝘳𝘰𝘸𝘥𝘧𝘶𝘯𝘥𝘪𝘯𝘨? 𝘋𝘰 𝘺𝘰𝘶 𝘬𝘯𝘰𝘸 𝘩𝘰𝘸 𝘱𝘦𝘰𝘱𝘭𝘦 𝘦𝘯𝘨𝘢𝘨𝘦 𝘪𝘯 𝘗2𝘗 𝘵𝘳𝘢𝘯𝘴𝘢𝘤𝘵𝘪𝘰𝘯, 𝘢𝘯𝘥 𝘸𝘩𝘺? 𝘑𝘰𝘪𝘯 𝘶𝘴 𝘵𝘩𝘪𝘴 𝘸𝘦𝘦𝘬 𝘰𝘯 𝘈𝘦𝘯𝘤𝘰 𝘚𝘮𝘢𝘳𝘵 𝘛𝘢𝘭𝘬: 𝘞𝘩𝘢𝘵 𝘪𝘴 𝘗2𝘗?
As in full-term, p2p means peer-to-peer. A p2p strives to construct a network between equally privi-leged and equipotent participants, while peers share the resources directly to other network partici-pants, with the practice of decentralisation — without the central coordination by any servers or stable hosts (Schollmeier, 2002). As in the opposite approach of the traditional client-server model, suppliers and consumers of resources could simultaneously present in p2p application. It is more beneficial to-ward all the peers inside the virtual community while the tasks are greater, faster, and more stable as it only serves point-to-point. It also lowers the risk of losing information or the possibility of being hacked.
Developed as one of the sharpest and most popular fin-tech practice, p2p has certain benefits: it tends to be more effective in managing and exchanging information with the shortcut, and more cost-saving since investment on the mid-server devices has been omitted, thus fitting to small scale network. How-ever, due to the complexity of running a p2p platform, it requires a specific development server as well as the client-server to better receive and output the resources. It might resulted in lower safety level when companies opt for easier solution, or it might be harder to manage while practices into a large scale network as more peers are involved and might lack a stable and high-capacity controller server.
The well-known examples of p2p would be Skype, Dat, and Jami. Most of them started from file-sharing networks, such as multimedia, and developed into a digital or smart capital nowadays. As more and more fintech platforms are popping up, the phenomena draws our attention to know more about p2p and dig deeper for its pros and cons.
►Major categorization in P2P
Crowdfunding is an internet-based practice that the funding to a project or venture from a large variety and possibly number of individuals. It is a form of crowdsourcing and alternative financing, while the former is a sourcing model in which individuals or organisations obtain goods and services, from a large and open group of participants and the later referring to ‘online marketplaces’, such as reward-based crowdfunding, equity crowdfunding, revenue-based financing, online lenders, peer-to-peer con-sumer and business lending, and invoice trading third party payment platforms.
One of the most famous crowdfunding projects popped up in the summer of 1885 in New York City. To keep the Statue of Liberty into the city-centre, newspaper publisher Joseph Pulitzer launched a crowdfunding campaign to raise the funds necessary to pay for the construction of the statue.
P2P lending is the practice of lending money to individuals or businesses through online services that match lenders with borrowers. P2P lending companies tend to offer cheaper interest rate to borrower and higher return to lenders when compared with traditional financial institutions since the cost of set-ting up a P2P lending platform is much cheaper than having a brick-and-mortar lending bank. Thus, the lenders can earn higher returns and the borrowers can also borrow money with lower interest rates. It is especially popular in China during recent years, while it achieved 1180.565 billion CNY in 2015 according to a newspaper article written by Tao in 2017.
►Rüdiger Schollmeier, A Definition of Peer-to-Peer Networking for the Classification of Peer-to-Peer Architectures and Applications, Proceedings of the First International Conference on Peer-to-Peer Computing, IEEE (2002).
►Bandara, H. M. N. D; A. P. Jayasumana (2012). “Collaborative Applications over Peer-to-Peer Sys-tems — Challenges and Solutions”. Peer-to-Peer Networking and Applications. 6 (3): 257–276.
►Glorioso, Andrea; et al. (2010). “The Social Impact of P2P Systems”. In Shen; et al. (eds.). Handbook of Peer-to-Peer Networking. Springer. p. 48.
►Goran Calic, “Crowdfunding”, The SAGE Encyclopedia of the Internet, 2018
►Schenk, Eric; Guittard, Claude (2009). “Crowdsourcing What can be Outsourced to the Crowd and Why”. Retrieved October 1, 2018.
►“The Rise of Future Finance”. Nesta.org.uk. Archived from the original on 2015–02–26. Retrieved 2015–07–24.
►“P2P Lending: What is an Expected Return? A Survey of Industry Voices”. LendingMemo. September 27, 2013. Retrieved March 28, 2017.
►Tao, L. (2017). Just a few big Chinese P2P lenders seen surviving in sector tarnished by scandal. South China Morning Post. Retrieved from: https://www.scmp.com/business/companies/article/2082423/just-few-big-chinese-p2p-lenders-seen-surviving-sector-tarnished
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