Virtual currency not more than electronic form of money which runs on mechanism of peer to peer technique. Peer to peer refers to sharing of data or assets (tangible or non tangible) between two parties without the intervention any regulatory or central authority.
Interaction between two individuals or groups totally decentralized. A strictly peer-to-peer exchange of currency was the primary goal driving the creation of Bitcoin, the most widely used cryptocurrency. It also offers more secure as well as fast transactions as compare traditional online dealings. However, there is no direct effect of virtual currency trading on the economy of a country as their value is not defined by gold, silver and other securities.
Overview of Peer To Peer Algorithm
The main feature of that each user is an equivalent owner of and contributor to the network. This kind of private network give wide range of freedom to the customers for sharing any kind of file whether legal illegal.
P2P refers to the exchange of cryptocurrencies, especially Bitcoin, which was created with the goal of enabling anonymous P2P transactions that don't require processing by a financial institution. This high level of encryption catch the millions of aspirants worldwide.
Peer To Peer against Centralized
Transaction with help of P2P does not need the participated parties to provide their confidential information, hence delivering immense privacy to everyone. Thus virtual currency trading became the first priority of elite businesses.
Whereas, not all cryptocurrency exchanges are truly peer-to-peer. Many of them are centralized exchanges subject to the regulations of the countries in which participants live. This means that governments sometimes require the exchanges to collect information about users' identities and transactions, resulting in an erosion of the privacy for which Bitcoin was targeting at.
Advantages and Drawbacks of Peer To Peer Networking
Firstly on the positive side, it is a cost reducing technique as maintaining this network quite inexpensive. There is no central configuration. Apart from this, there is no or very nominal charge. No doubt reliability of common is very high as it is not dependent on a centralized system. Even if one part of the network fails, it will not disrupt other parts.
Only the user will not be able to access those files. Implementation is also very easy as to setup a peer to peer network requiring no advanced knowledge. Since all the connected computers can manage themselves, there should be no many configurations. However it needs some specialized software.
Well, every coin has two sides, so let’s talk about demerits of this network. To start with, as the network is decentralized, there is no central server, thus files are stored in a single devices. Whole network accessibility is not in the hands of a single person. Moreover, sometimes there can be unsecured types of codes present on a particular terminal. It is virtual currency trading is an ocean of illegal activities, as network to buy and purchase illegal goods as well as services.