What is Peer-to-Peer (P2P)?
Let's find out Peer-to-Peer (P2P) meaning, definition in crypto, what is Peer-to-Peer (P2P), and all other detailed facts.
P2P refers to a decentralized network in which peers connect with one another to share data or tasks. This means that for the entire process to take place, two or more parties must arrange and agree to deal with each other. Besides, there is no need for a central server to facilitate and maintain such communication.
All peers are treated equally and have access to the same benefits. To use a P2P system, all you need is an internet connection and a copy of the software (or protocol). In the absence of a central server processing requests and managing resources/tasks, peers often make all or part of their resources available to the network.
In the context of cryptocurrencies and blockchain, P2P is especially important. For example, Bitcoin's whitepaper describes its protocol as a "Peer-to-Peer Electronic Cash System," which refers to all members participating in a mutually beneficial and equal manner without the use of any intermediaries.
Miners that provide processing power to the network instead of block subsidies and transaction fees have a more complete copy of the data. However, all peers or nodes of a blockchain typically have the same copy of account and transaction history records.
While Bitcoin is truly a peer-to-peer protocol that does not rely on a centralized third party, P2P doesn't always have to be blockchain-based. For example, despite the fact that BitTorrent was not originally built on the blockchain, it is now one of the most popular decentralized peer-to-peer systems.