Peer-to-Peer Blockchain Networks: The Rise of P2P Crypto Exchanges

Cryptocurrency is an exploding asset around the globe, with an estimated 300 million users worldwide. The most popular crypto, Bitcoin, was created to exchange value anonymously and directly among users with a peer-to-peer (P2P) transaction model that eliminates the need for a central intermediary such as a bank or broker. This P2P model laid the foundation for the peer-to-peer blockchain technology which powers Bitcoin — and all cryptocurrencies.

In this article, we’ll explain the mechanism of peer-to-peer networks, their incorporation into crypto exchanges, and the peer-to-peer blockchain technology that’s revolutionizing the crypto domain.

What Is a P2P Network?

The term P2P refers to decentralized networks of interconnected computer systems containing peers, or nodes. All nodes are equal, and the exchange of data occurs without a central server — that is, each computer or node can act as both a file server and a client. For example, when acting as a client, a node downloads data from other participants; and when it’s acting as a server, it can be a downloading source.

Put simply, the peers or participating computer systems can simultaneously consume and provide resources on the same network. These resources can be files, storage, access to a scanner or printer, or processing power. There is no centralized authority, and no single point of failure. All interconnected nodes can engage in storing, distributing and uploading files. Transactions are peer-to-peer — P2P — meaning that they take place directly between the two parties involved, sans intermediary.