P2P Trading

A Peer-to-Peer (P2P) system is a decentralized network where nodes (peers) act as both suppliers and consumers of resources, such as files, computing power, or services.

Key Characteristics of P2P Systems:

1. Decentralized: No central authority controls the network.
2. Equal Nodes: All nodes have equal status and can act as both clients and servers.
3. Resource Sharing: Nodes share resources, such as files, computing power, or services.
4. Autonomous: Nodes operate independently, making decisions based on local information.

Types of P2P Systems:

1. File Sharing: Nodes share files, such as music, videos, or documents.
2. Distributed Computing: Nodes share computing power to solve complex problems.
3. Communication: Nodes communicate directly, enabling instant messaging, voice over IP (VoIP), or video conferencing.
4. Blockchain-based: Nodes use blockchain technology to facilitate secure, decentralized transactions.

Advantages of P2P Systems:

1. Scalability: P2P systems can handle large numbers of nodes and transactions.
2. Flexibility: Nodes can join or leave the network as needed.
3. Resilience: P2P systems can continue operating even if some nodes fail.
4. Cost-Effective: P2P systems can reduce infrastructure costs by leveraging existing resources.

Challenges and Limitations of P2P Systems:

1. Security: P2P systems can be vulnerable to security threats, such as malware or data breaches.
2. Trust: Nodes may not trust each other, making it difficult to establish reliable transactions.
3. Regulation: P2P systems may operate outside of traditional regulatory frameworks.
4. Scalability Limitations: As the number of nodes increases, P2P systems can become slower and less efficient.