20.08.2018 By SociumTrade 2241 views

P2P systems: advantages and application

In our social trading and investment platform, we employ the P2P system that provides our users with the most convenient working conditions. And this article will explain what the P2P interaction is and why it is so efficient.

P2P, which stands for peer-to-peer, is an app architecture that allows users to collaborate directly without any third-party intermediaries. Every computer involved in the P2P network acts as a node for sharing information within a group, which means computers serve as separate servers, avoiding the necessity for a central server. Peers play roles of consumers and suppliers of certain resources at the same time.

Here are the key advantages of P2P systems:

  • - Such networks are easy to set up and use;
  • - No need for any third party in users interaction;
  • - Less expensive as does not require setting of a server.

This technology had been applied in many domains, but it became popular in 1999, when music and file-sharing application Napster was released. It was the beginning of the peer-to-peer networks as we know them today.

Though Napster shut down due to music copyright violation, the technology remained and was successfully employed by real-time marketplace app Tradepal, Open Garden Inc. (FireChat developer), web search engine FAROO, freeware program Osiris, network Gnutella, and many others. Besides, digital cryptocurrencies are based on the P2P system.

As you can see, peer-to-peer systems are widely applied in various spheres: from digital assets and file-sharing services to instant messengers, IP telephony (for instance, Skype), and high performance computing. Of course, it was impossible not to adopt such a convenient network in the sphere of trading and investments. The P2P system has gained in great popularity among market participants because it ensures privacy and security of transactions and is resilient to censorship usually imposed by governing bodies due to the P2P decentralized nature.

One of the ways of applying the peer-to-peer service in the financial sphere is called P2P lending. It is the practice of lending money to individuals via online services matching lenders with borrowers. This practice allows investors to generate higher profits compared with the services offered by traditional financial institutions and borrowers (traders) to borrow funds at lower interest rates. It is certainly a win-win situation.

Considering all the benefits of the peer-to-peer system, we render this service to our users so they could save their money on low transaction costs and reap even bigger profits!