Home / Articles / Security / Peer-to-Peer (P2P) Network Explained

Peer-to-Peer (P2P) Network Explained

Peer-to-Peer (P2P) networks are often associated with illegal file sharing. However, like many other technologies, there is a difference between purpose and application. P2P networking concepts drive many valuable services today, from ridesharing to online marketplaces.

Each time you use an application like Grab, Uber, or GrubHub, you're using what is essentially a P2P network.

What is a P2P Network, and How Does it Work?

A P2P network is a decentralized network where each device has an equal opportunity to share data. Unlike traditional networks, there is no central server that regulates or controls access to the content. Each device or node can act as a server and client.

This direct association means that everyone who uses a P2P network can upload and download content directly from other users on the same platform. The core premise of any P2P network is that all nodes must belong to the same network to participate.

Centralized vs. Decentralized Networks

The simplified concept of Centralized vs Decentralized Network.
The simplified concept of Centralized vs Decentralized Network.

A single entity controls centralized networks. The entity controls every action within the network, from data paths to access rights. These networks are also referred to as client-server networks because clients send requests to servers for data and services.

Conversely, decentralized networks can have multiple points of control. No central authority regulates how things work within these decentralized systems. Instead, each user owns some part of it while still communicating with others through shared protocols.

Advantages of P2P Networks

P2P networks offer several advantages over traditional networks.

Secure Against Hackers

They are more secure since hackers don't have a central point to target. For example, the lack of a centralized database means hackers can't take information in its entirety by compromising a single node.

Cheaper Cost

Decentralized networks are also cheaper since multiple people or organizations contribute towards the network infrastructure. No single organization needs to pay for all maintenance or data storage costs.

Increased Efficiency

Efficiency is also enhanced thanks to asynchronous operation. Different nodes don't need to wait until they're sure they've received all data before processing anything else. They can continue working while waiting for missing information and come back later.

Easy To Manage

Finally, P2P systems are more adaptable than their centralized counterparts because they can easily add or remove nodes whenever necessary without disrupting existing ones.

Disadvantages of P2P Networks

P2P networks also come with several disadvantages.

Not Secure By Default

One of the most significant disadvantages is that P2P networks are not secure by default. Since they don't use centralized servers, it's up to users to make sure their data is protected. If users don't encrypt their files, anyone accessing their device can see (and steal) them.

High Bandwidth Usage

Another disadvantage is bandwidth usage. This disadvantage is most readily apparent in popular P2P file-sharing networks like BitTorrent. Massive ongoing file transfers can clog up networks and bring overall traffic to a standstill. 

Poor Performance

Finally, there's also an issue with performance speed. Since every computer connected via a P2P network must share resources, less capable machines may find themselves swamped by requests. These machines may become essentially unusable. 

Examples of P2P Networks in Different Industries

The most obvious example of how P2P technology works are file sharing networks. After all, P2P file-sharing networks are why so many copyright lawyers are gainfully employed. However, the concept of P2P networking drives many industries today.

Here are some examples of P2P concepts in different walks of life that you might be familiar with;


This is how a transaction works in the blockchain using a decentralized P2P network.
This is how a transaction works in the blockchain using a decentralized P2P network.

Cryptocurrency and blockchain technology also uses a decentralized P2P network as their backbone or platform for transaction processing. These P2P networks form a digital ledger system and decentralized database for recording transactions. 

Blockchain enables people to manage digital information together without using traditional third parties like banks or governments as intermediaries.

Music Industry

This is how old Napster works using P2P sharing.
This is how old Napster works using P2P sharing.

The P2P file-sharing network, Napster, was started by Shawn Fanning and Sean Parker, who were students at Stanford University in 1999. The Recording Industry Association of America (RIAA) eventually shut it down. Fanning's company later revived it as Grokster, resulting in another shutdown.


Ridesharing is also a form of a P2P network. Uber, for example, allows drivers and passengers to connect directly via an app that uses the P2P network. It became so popular that the service spread to over 60 countries worldwide.


Airbnb is a popular P2P online accommodation rental service that allows people to lease or rent short-term lodging, including vacation rentals, apartment rentals, homestays, hostel beds, or hotel rooms. Airbnb operates independently of a central authority and has no single owner. 

Social Media Platforms

Social media platforms like Facebook and Twitter also use P2P systems for file sharing between users' devices. When you click “like” on Facebook or retweet on Twitter, your device sends information about these actions directly to other users' devices.


As you can see, P2P networks are not the monster about which copyright trolls often complain. Like other technologies, they can serve highly productive functions when applied in the right ways. Whether you're aware of P2P or not, you're likely using some part of P2P networks in your everyday life.

P2P application potential is enormous and will only increase so long as trust in central authorities continues to erode. By knowing how they work, we'll hopefully understand better why they work so well and how they evolve to adapt to the ever-changing technology environment.

Read More

Photo of author

Article by Timothy Shim

Keep Reading