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Understanding the Basics of Peer-to-Peer Network

Peer-to-peer marketplaces remain one of the fundamental spheres in the world of cryptocurrency. Otherwise known as P2P networks, they’re decentralized networks whose first public appearance can be traced back to the 1980s and 199os when a college student Shawn Fanning who created a music-sharing platform, Napster. This platform was a dermatisse of anuthorized sharing of copyrighted songs. Although in 2001, Napster was shut down by lawmakers, following lawsuit from the American music industry. And, in some way, this gave rise to an influx of other P2P networks so keen in the innovative growth of decentralized networks.

In recent years, beyond the ruse, the P2P concept is being utilized in many online marketplaces, web search engines, and even in vedeo streaming services. More still, the P2P forms the major backdrop of the Blockchain technology and its importance has grown quite tremendously with the evolution of digital monies.

What Are Peer-to-Peer (P2P) Networks?

In basic computer knowledge, a peer-to-peer network refers to a set of devices that collectively allows its users to store and share files. Each participant acts as an individual node and have equal performance power.

In the world of decentralized finance, the term peer-to-peer (P2P) refers to the exchange of digital assets or cryptocurrencies through a distributed network. It’s a kind of distributed communication channel which allows users to communicate without the interference of an intermediary. In many cases, such environment can also serve as a meeting point between lenders and borrowers.

How Do P2P Networks Work?

Every peer-to-peer system is maintained by a distributed network of computers. Since each user (node) holds a copy of the file — acting as both a server and a client — they need no central authority or server. Each node, however, can download files from other nodes or upload files to them, using their own hard drives to store their files as a replacement for central server.

Since each node can to store, transfer and receive files, P2P networks tend to be faster and more efficient. As compared to their traditional counterparts in which there’s a single point of failure exists. The distributed nature of a peer-to-peer network makes it incredibly resistant to cyber attacks.

Types of Peer-to-peer networks

Based on their architectures, P2P system can be divided into three main categories: unstructured, structured and hybrid.

Unstructured P2P Networks

An unstructured P2P network has no specified organization of the nodes; therefore the nodes connect and communicate in a random manner. These systems are considered a better option for high churn activity ( the frequent rate at which nodes enter and leave the network). These systems are easy to build.

One of its major loophole is that they make use of high Central Processing Unit and memory use because search enquires are sent out to highest number of peers available in the network. This tend to flood the network with search queries, especially in a case where small number of peers is offering the needed content.

Structured P2P Networks

Structured networks, on the other hand, uses an organized architecture, allows nodes to search for contents more efficiently despite the data not being widely available. In some cases, this search for data is achieved through the implementation of distributed hash table (DHT). Although structured networks efficiently handle the issue of traffic, they still pose centralization problems, they usually higher setup and maintenance costs.

Hybrid P2P Network

A hybrid network combines both the traditional client-server model with some peer-to-peer infrastructures on a single platform. It uses an index server that stores data based on the location of the resources used for the searches.

As compared to other types of peer-to-peer networks, this type of model presents better cumulative functionality since they combine all the advantages of each model, thereby leading to more efficiency and decentralization.

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CrossFi is a cross-chain liquidity sharing protocol featured in multi-chain lending and synthetic assets.

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