Mark Tencaten | What are Peer-to-peer Networks

P2P, or peer-to-peer, networks

Mark Tencaten says that you must first comprehend the terminology used in Bitcoin in order to comprehend how a blockchain functions. Peer-to-peer networks, sometimes known as P2P, are one such word. P2P networks are the foundation upon which blockchain technology is constructed; hence understanding P2P is crucial to comprehending blockchain. Even though it was illegal, Napster, a music-sharing program, invented peer-to-peer networks and paved the path for many other programs and ideas. Let's first examine the centralized system and its operation before attempting to comprehend the peer-to-peer network.

Understanding Centralized System

Consider a community from the past that operated on a barter system. People exchanged goods for goods in this system, and while trading, the promises grew and were forgotten or broken. Therefore, everyone decided to keep a record of all the commitments and transactions. But surely someone has to keep it up to date? So they designated a person to monitor it and update the database. It became a centralized system in this fashion. Everyone made commitments and transactions to the Tracker, who recorded them.

So, Mark Tencaten explains, in a nutshell, all other networks give their data to the Tracker, the center node in a centralized system, which subsequently delivers the data to the designated receivers.

Over time, the commitment tracker decided to misuse his authority and started charging a modest fee for maintaining track of everyone's commitments. He began taking bribes, wiping off pledges from the record, etc.

Your account is completely under the company's or bank's control in a centralized financial system. As they maintain track of all balances, the central server verifies the accuracy of your transactions. To choose who to trust, a centralized system must have a never-ending supply of personal information about the user, yet this makes them more susceptible to the hacking of sensitive information and gives the user no control over their data. The same is applicable to your social media account posts. Once you upload something, the organization that controls a social networking site owns your information and is free to do whatever they wish. They are also vulnerable to hacking attacks and data breaches. They often charge a fee, which over time, may become expensive.

So how does this relate to peer-to-peer networks?

Mark Tencaten continues to explain, in keeping with the previous illustration, the Tracker is abusing his authority by retaining a lot of private information on the residents of the community. One citizen determined that it couldn't operate this way once others noticed it. He understood that decentralizing the system was the only way to resolve this.

Keep everything completely open. It would be challenging for people to break their vows to one another if everyone owned a copy of the book. Similar to a peer-to-peer network.

Peer-to-peer networks are scattered and decentralized. The townspeople are a collection of separate computers, and each one is known as a node or peer. Without a central computer, they communicate with one another and share data. Since every node is equal to one another and has the same capabilities, they are referred to as peers.

A software developer named Satoshi Nakamoto created Bitcoin in 2008, during the peak of the Financial Crisis, and cryptocurrency was born as a result. It is an entirely electronic, mathematically supported payment system. The goal of the innovation was to create a method of exchange that could be electronically communicated in a safe, unchangeable, and verifiable manner while being decentralized.

Although all P2P networks are dispersed, not all of them are decentralized. Some P2P networks are slightly centralized. To direct network activities, they depend on a centralized authority.

Peer-to-Peer Network Types

Three different P2P network types exist Hybrid, Unstructured, and Structured.

1. Unstructured Networks

Peers are not organized in unstructured networks. Anyone can randomly get in touch with anyone else. Since the information is readily accessible, a lot of processing power is needed.

2. Structured Networks

Networks with structures are organized. Although more centralized, they are more effective.

3. Hybrid Networks

Peer-to-peer networks and the client-and-server architecture are combined in hybrid networks. Both are efficient and decentralized.

Data Propagation

Data is sent between nodes, i.e., from one node to another, during data propagation. The same data propagates slowly to all of the network's nodes.

Network latency

Network latency is the term for any lag in data transmission through a network. The amount of time taken by the data to move between locations, i.e., from one location to another, is known as latency. Low latency occurs when the delay is little, and high latency occurs when the delay is high. Data latency can be impacted by a wide range of variables, including physical distance, international communication across underwater cables, router problems, etc.

The core of blockchains is peer-to-peer networks. Blockchains are unique because they are decentralized and built on peer-to-peer networks. They function similarly to spreadsheets, continuously capturing, transporting, and storing numerous identical copies of network information. There is no central hub for blockchain technology because it is based on a P2P network. As a result, there is far less possibility of a breach or data loss. Since no central authority keeps records to verify the accuracy and integrity of every transaction, blockchain relies on a consensus process. Each peer in the network that mines and stores data must investigate the transaction, confirm its status, and come to an agreement.

Conclusion

According to Mark Tencaten, peer-to-peer networks have been effectively employed since 1999 to aid in developing software and ideas: Peer to Peer networks have served as the basis for a whole new type of money. The future of data ownership and storage has improved due to peer-to-peer networks and the blockchain.