A P2P network in cryptocurrency refers to a decentralized system where participants interact directly with each other without the need for a central authority. In this network, every participant is both a client and a server, allowing for the sharing of information and resources.
Each participant in the P2P network maintains a copy of the entire transaction history, known as the blockchain. This helps to ensure transparency and security as every transaction is verified by multiple nodes in the network.
Transactions in a P2P network are broadcasted to all participants and confirmed through a process called consensus. This consensus mechanism eliminates the need for a trusted third party to validate transactions, making the network more resilient to fraud and censorship.
Overall, P2P networks in cryptocurrency promote decentralization, transparency, and security by allowing participants to transact directly with each other without the need for a central intermediary.
