Blockchain - a distributed P2P network

Network Types

Centralized network

• Built around a single server and use client-server architecture.
• Advantages: Efficiency, consistency and affordability.
• Disadvantages: single point of failure can be risk for organizations, limited scalability, lack of bandwidth

Decentralized network

• Distributes the workload among different machines.
• Benefits: reliability, scalability and privacy.There is no single point of failure. Information passes through a number of different points.
• Disadvantages: requires more machines.

Distributed Network spread over different networks. Part of distributed computing architecture.

P2P network

• Consists of a group of devices that collectively store and share files.
• Each participant (peer) has equal power and each node holds a copy of the file and each node can download nodes from other nodes.
• In a P2P network there is no central governing authority.
• All nodes are equal to each other. Anyone connected to this network can share and download any file shared by other users in the network
• A P2P network refers to the exchange of digital assets or cryptocurrencies via a distributed network and there is no need for intermediaries. P2P networks are at the center of most cryptocurrencies and other stributed computed applications such as Netflix, Amazon, Google.

P2P networks categorized into 3 main types :

• Unstructured, no specific organization of nodes. Participants communicate randomly with one another. They are robust and require higher memory
  

• Structured allows nodes to search for files even if the content is not available. They are more efficient but require higher maintenance and setup costs but also they are less robust.

• Hybrid Combines the conventional client server model with some facets of the peer-to-peer architecture and improve overall performance

Server based vs P2P network

Server based network

• Network security and storage are controlled and managed by one or more servers
• More complex and costly to manage and set up compared to a P2P network
• Are good for businesses that are having more than 10 computers

P2P network

• Consists of devices that are collectively store and share files.
• There is no central regulatory authority
• Anyone can share and download any file which is shared by other peers in the network

P2P network & Blockchain

• In 2008, Satoshi Nakamoto defined Bitcoin as a Peer-to-peer Electronic Cash System
• P2P allows Bitcoin and other cryptocurrencies to be transferred worldwide, without the need for any central server.
• Anyone can set up a Bitcoin node if they want to participate in the process of validating and verifying blocks
• Blockchain acts as a digital ledger that publicly records all the activity. If any malicious activity is found the network quickly rejects it
• Nodes provide security to the network by verifying transactions against the system’s consensus rules
• The P2P architecture of blockchains provides benefits of greater security than traditional client-server based networks as distribution of large numbers of nodes creates an immune system to Denial-of-Service attack.
• Changing data is almost impossible in a distributed P2P network especially when we talk about big networks such as Bitcoin
• Unlike standard bank accounts, cryptocurrency can’t be drained or frozen by governments.