Deanonymisation of Clients in Bitcoin P2P Network | Proceedings of the 2014 ACM SIGSAC Conference on Computer and Communications Security (2024)

FAQs

What is the bitcoin P2P network and how are transactions processed in the bitcoin network? ›

The term peer-to-peer, or P2P, means that the computers that participate in the network are peers to each other, that they are all equal, that there are no "special" nodes, and that all nodes share the burden of providing network services.

Peer-to-Peer Network Architecture

There is no server, no centralized service, and no hierarchy within the network. Nodes in a peer-to-peer network both provide and consume services at the same time with reciprocity acting as the incentive for participation.

Blockchain is a P2P network that acts as a decentralized ledger for one or more digital assets, which refers to a decentralized peer-to-peer system where each computer keeps a complete copy of the ledger and verifies its authenticity with other nodes to guarantee the data is accurate.

Decentralization: P2P networks eliminate the need for central servers, distributing data across various nodes. This reduces the risk of single points of failure and enhances overall network resilience, a feature particularly valuable in blockchain development where decentralization is crucial.

The main advantages of P2P include reducing the load and cost of servers, increasing the availability and reliability of resources, and enhancing the privacy and anonymity of nodes. However, P2P can also be difficult to manage and secure due to varying capabilities, configurations, and trust levels among nodes.

P2P networks are decentralized, meaning no central server or authority controls the network. Instead, each participant or peer has equal capabilities and responsibilities. Peers interact directly with each other, sharing resources and services without relying on a central point of control.

As blockchain is a decentralized system of peer to peer network, it is highly available due to decentralization. Because of P2P networking capability, even if one peer gets down, the other peers are still present. Thus nobody can take down the blockchain.

The crux of the difference between a client-server and a peer-to-peer network lies in the fact that in a peer-to-peer network, each node can both request and provide services. On the other hand, in a client-server network, the client nodes request services and the server node provides them.

The primary difference between these two terms is that, in a peer-to-peer network, every node can ask for assistance and deliver services. While in a client-server network, the client nodes demand services and the server node answers with assistance.

P2P networks ensure transparent, immutable, and secure transactions by connecting nodes worldwide, preventing forgery. There are three types of P2P networks: structured, unstructured, and hybrid, each varying in organization and efficiency levels.

What are the disadvantages of peer-to-peer networks? ›

Example. When a bank customer accesses online banking services with a web browser (the client), the client initiates a request to the bank's web server. The customer's login credentials may be stored in a database, and the webserver accesses the database server as a client.

At its core, blockchain is a groundbreaking departure from traditional database structures. It is a decentralized, peer-to-peer network forming a communal chain of data. In this innovative work, information is organized into blocks linked to the previous one, creating an unalterable chain – the blockchain.

This means that clients request and receive data from servers, which handle the processing and storage. Client-server networks are more efficient, reliable, and secure than peer-to-peer networks, as they can handle large amounts of data, distribute the workload, and implement security measures.

In broad terms, transactions get inserted into the blockchain by nodes when one party sends a Bitcoin to another. Miners run a unique software program to inscribe the blocks onto the Bitcoin (BSV) blockchain. Nodes are the base of the blockchain.

Creating a Transaction: When you send bitcoin, you create a transaction from your digital wallet. This transaction includes the sender's address (public key), the recipient's address (public key), the amount of Bitcoin to be sent, and a transaction fee that you're willing to pay to the miners.

In a peer-to-peer network, computers on the network are equal, with each workstation providing access to resources and data. This is a simple type of network where computers are able to communicate with one another and share what is on or attached to their computer with other users.

In all cases, the funds are transferred from the payer's account to the platform's account. The platform then transfers the funds to the payee's account. This process happens behind the scenes and is usually instant. Just enter the amount you want to send, the recipient's information, and hit send.