P2P

Peer-to-Peer (P2P) refers to a decentralized network structure where participants interact directly with each other without intermediaries. In the context of cryptocurrencies, P2P networks enable users to trade digital assets directly, bypassing traditional centralized exchanges. This direct interaction reduces the need for middlemen, potentially lowering transaction fees and increasing privacy. P2P networks leverage blockchain technology to ensure secure and transparent transactions, making them an essential component of decentralized finance (DeFi) and other blockchain-based applications.

One of the key advantages of P2P networks is their resilience and resistance to censorship. Because there is no central authority controlling the network, it is difficult for any single entity to shut it down or interfere with transactions. This decentralization is a core principle of cryptocurrencies like Bitcoin, which was designed to allow users to transfer value directly without relying on banks or other financial institutions. In addition to trading, P2P networks are also used for various other purposes, including file sharing, decentralized lending, and even collaborative content creation.