Technology

Role of Peer-To-Peer Technology In Bitcoins- Some Points To Note

Before 2009 one hardly could think of sending a huge amount of money to others without an intermediary banking system or government. Well, some people always have the visualization power to think out of the box and they make a difference in society. If you are planning to trade Bitcoin, you may consider using a reputable platform like Bitcoin Boom.

Satoshi Nakamoto is the person who brought the amazing idea of sending money to individuals without any banking need and successfully made it possible by creating the cryptocurrency bitcoin. Bitcoin is now the most famous cryptocurrency in the world and the peer-to-peer technology behind it is the key to its success.

Overview of Peer-To-Peer Technology 

In simple words, peer-to-peer means user to user or end-to-end. In short, it is called P2P. The Bitcoin network is based on Blockchain technology that allows a transaction that is user-to-user. The network is spread in such a way that each user has a direct connection to any other user of the network. It is often called a distributed ledger system because the transactional data created by every user are stored in the ledgers or boxes and they are connected to each other.

Bitcoin is digital money and all its transactions are online. Users use their computers or mobiles to make a transaction. In the bitcoin network, the users are connected via the internet and there is no center point. The P2P technology makes it possible to connect each computer to the other so that the transactions can be done directly.

Functioning of Peer-To-Peer Technology In Bitcoins

To understand the motive for choosing P2P technology we have to know some history of the situation in 2008 and 2009. In 2008 the world was immersed in a global financial crisis. From the early 21st century the unethical lending practices of the home-loan lenders were targeting low-income customers. Not only that, the global financial institutions started taking risks in many aspects. The real estate industries and mortgage-backed securities in America were crushed down in value. 

The bursting of the United States housing bubble was like a blunder throughout the US and affected the whole nation as well as the global economy. One of the biggest banking institutes, Lehman Brothers declared itself bankrupt on 15 September 2008. This incident finally leads the global financial crisis to its climax.

Satoshi Nakamoto wanted to come up with a system that reduces the need for banks and the government to send money. The motto of bitcoin innovation was to address the role of the banking system and the need for people’s trust to run it. So, the peer-to-peer technology was perfect for this situation.

Advantages of Peer-To-Peer Technology 

The peer-to-peer technology has almost changed people’s viewpoint over transaction mediums and their possibilities. There are some amazing advantages we get from technology.

  • Bitcoin is not even controlled by a company or authority. 
  • Bitcoin’s P2P network is always open, unlike a banking schedule. Users have access to their money 24/7, 365 days a year.
  • It is an open-sourced network. It means anyone can use it. There are government rules applied to enter into the network. One just has to open a bitcoin account on a platform that facilitates bitcoin transactions.
  • The peer-to-peer transactions don’t take much time. 
  • Bitcoin reduces the need for banks and also the need for so many internal layers of procedures. The transaction charges in peer-to-peer systems are almost negligible.
  • The technology used cryptographic encryption to secure transactional data. Also, the data is redistributed to the blocks of the network. That means, there is no possibility of hacking or losing any data.

Disadvantages of P2P network: Every good thing has a black side too. Though not prominent, bitcoin’s P2P network can go through some problems.

  • The network is computerized and internet-based. So, a virus attack can be a thing that may happen sometime.
  • P2P is a modern technology that can only be accessed through computers and mobiles. So, people in rural areas who don’t have these accessories can’t use the network.

Conclusion:

To be concluded, peer-to-peer technology has truly changed our lives by means of transactions. In a fast-forward society these kinds of technologies are needed to add more pace. Though, it is an individual’s opinion that whether technology is making a good future for society or not, it is undoubtedly demanded by people all over the world.

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