What is P2P (Peer to Peer)?

P2P technology, or Peer-to-Peer, enables personal computers to directly connect with each other, bypassing the central computers that normally serve up Web pages. P2P represents the evolution of how PC’s interact with each other.

Historically, internet-connected computers have been generally relegated to being nothing but clients, because of where their interaction occurs - at the edges of the Internet, isolated from the traditional Domain Name System (DNS) - because they have no fixed IP address.

However, as peer-to-peer computing evolves, the sharing of computer resources and services by direct exchange between systems becomes more frequent. These resources and services include exchanging information, processing cycles, cache storage, and disk storage for files. Peer-to-peer computing takes advantage of existing desktop computing power and networking connectivity, allowing economical clients to leverage their collective power.

In a peer-to-peer architecture, computers that have traditionally been used solely as clients communicate directly among themselves and can act as both clients and servers, assuming whatever role is most efficient for the network. This reduces the load on servers – allowing them to perform specialized services (such as mail-list generation, billing, etc.) more cheaply and more effectively. At the same time, peer-to-peer computing can reduce the need for IT organizations to grow parts of its infrastructure in order to support certain services, such as backup storage.

P2P, as a class of applications, takes advantage of resources - storage, processing, cycles, content, human interaction - available at the edges of the Internet, without relying on central control points for interaction between two people on the internet.

The greatest demand for P2P applications will be at the individual consumer level, where one party can exchange information and files with another party. But these fluid networks can be used for many purposes besides song swapping. P2P Cash is just such an example of how peer to peer applications can use a means to transfer cash from one individual to another without ever involving a bank or other financial institution.