What Is P2P (Peer-to-Peer)?

In a peer-to-peer network, each participant (peer or node) acts as both client and server. On the Bitcoin network, nodes relay new transactions and blocks to each other, each keeps a copy of the ledger, and each verifies the rules independently. This way, the network keeps running even if a single company's server goes down; it also becomes harder to apply censorship or to halt the system by attacking a single point.

In the cryptocurrency world, P2P is also used in a second sense: P2P trading platforms where users buy and sell directly with each other. In this model, for example, a user posts an ad to sell USDT, the buyer sends payment by bank transfer, and the platform holds the coins in an escrow account until the trade is complete. The platform here is not the counterparty but the intermediary and, in case of a dispute, the arbiter.

The P2P model also has limits. On the network side, all nodes processing the same data restricts scalability. On the trading side, there are fraud risks such as fake payment receipts, payments being reversed afterward, or the transfer of money from illicit sources; the counterparty's rating and trade history are therefore important.