To keep the Blockchain running, it requires a network that resides on the internet. Furthermore, within the network, there are certain exchanges, for purposes of updates. These updates are required to continuously keep the distributed ledger system up to date with the latest block.
If you turn your computer on and start to run Blockchain protocol on it, it will become part of the Blockchain network. Next, I would do the same with my computer, then my machine would become part of the network too. Every single device that is connected to the internet, and running Blockchain, becomes part of the network.
This way all those devices can communicate with each other using the internet, and keep on updating each other. Because there is no master node or a centralized machine that has a different purpose than the rest of them, this network is called peer-to-peer network. Peer to peer networks have existed for a long time.
Therefore, there is nothing new about it. However, because it has no master node of any kind, this is not a centralized network, but a decentralized P2P network. This is very important, as it tells you that there is no boss of any kind; so, it decreases the possibility that one or more nodes on the network might be able to manipulate the rest of the nodes.
Manipulation of any kind is simply impossibly, and that, in itself, is proof we can trust the system. The network itself is solely based on a technology that’s existed previously; however, this time it has a different purpose. What you have to understand is that when it comes to a peer-to-peer network, there is no central server or central client. In traditional centralized networks, there is the primary server, or central servers, and multiple clients; and the way they are connected is that the servers are always dictating what the clients can have. Peer-to-peer networks, on the other hand, are completely different, as all nodes on the network serve both purposes, they are all servers as well as clients.
Meaning, no one machine can have a bigger decision power than any other on the same network. Therefore, P2P networks are always working together, making decisions together, and equally distributing those to all nodes on the network. Another problem with centralized networks is that if one node is ready to share the latest news with the rest of the network, first it would have to send the traffic to the master node or server, which then would be able to do many things. The server could manipulate the traffic before forwarding to any other node. Managing the traffic would be easy on the server node, as once the server would receive the traffic from client A, the server would not send the same traffic back to client A (as that was the source in the first place). Instead, the server would send the traffic to the rest of the clients, but if this trade would be manipulated already, neither the remainder of the nodes or client A would never find out about it.
Another issue would also be if the server would decide to send the traffic only for a particular group of clients, instead of all of them. Again, this could reduce the power of an extensive peer-to-peer network, and in the case of the Blockchain, this would not be an advantage. The worse that could happen in a centralized network is this: once the server would receive traffic for the sake of conversation, data about the latest confirmed block, imagine that the server would decide not to share this data with any other client.
This would just put the Blockchain out of business. Therefore, the only way that the system would operate is to use a decentralized P2P network. In case you wonder how the server would make such a decision itself, well, it would not. Even though administering a server, or a small group of servers, may be straightforward for a person; when it comes to a P2P network, a person with evil intentions, like hacking purposes, or traffic manipulations, would have a hard time to do so and the reason is straightforward. Administering a large group of machines manually that reside all over the internet is nearly impossible. This is the reason why if you want to open a company, and you want to be the boss, you would create a traditional centralized network by having a master node that you can administer anytime you want. Again, P2P networks have no boss.
Therefore, there is no one to blame, and every machine on the network shares the same responsibility. In any system, centralized or not, there is always some delay. This is called latency. By the time one device reaches the other, it’s just never the same amount of time. Technically, latency is the time defined while the data travels between its source and final destination.
This is something that you may consider understanding as data propagation can take some time, especially when there are thousands of nodes on a decentralized system. Let’s look at an example for better understanding. Imagine that node A is ready to share its latest block with node B, C, and D. P2P networks are also known as dumb networks, as they have no idea what kind of data they are transferring; all they know is once there is data that needs to get transferred across the network they will do a broadcast making sure that all nodes are receiving the same data. So back to our example of four nodes and their data propagation.
Imagine that node A is located in Los Angeles, US; node B is located in Sydney, Australia; node C is in Cape Town, South Africa; and node D is in London, UK. They will all receive the same data; however, some of the nodes may get the data earlier than the other nodes. Therefore, the order of the transactions might differ on the nodes.
In summary, peer-to-peer networks are helpful for the following reasons:
- Reducing overhead by not sharing data over multiple nodes instead of keeping everything in one centralized location.
- Reducing risk of counterfeiting and manipulating data.
- Reducing third party interference, therefore, each transaction of smart contracts have fewer fees as well faster implementation.
