Peer-to-Peer Network Architecture

Peer-to-Peer computing or networking is a distributed application network architecture that spreads workload between peers. Peers are equally privileged, participate equally in the application and are said to form a peer-to-peer network of nodes.

Bitcoin as a Peer-to-Peer Network

Formally, Bitcoin is a peer-to-peer network built on top of the internet. In the early days of Bitcoin the network had a flat topological structure, where users were capable of running full nodes which performed all of Bitcoin's main functions: transaction creation, transaction validation and mining (see bitcoinv0.1). However, as the network has grown, the requirements needed to perform different functions on the network have evolved and nodes have become more specialized. The 3 main functions of the Bitcoin system are, in general, performed by separate entities. Transaction creation is done by SPV wallets. Transaction validation is done by the Bitcoin SV node software and mining is a separate function performed using purpose built mining software.

Peer-to-Peer Architecture and the Bitcoin Scalability Dispute

Peer-to-peer is a term often misused and misunderstood, partly due the philosophical significance of decentralization which is seen as a key feature of blockchain technology. It has also been at the heart of disputes within the Bitcoin community that have lead to contentious forks that have split the Bitcoin blockchain on two occasions as well as a general slow-down in the development of the technology.

On the one hand the role of transaction validation and mining cannot be dominated by a single entity as the network would cease to provide any cryptographic or game theoretic advantages to existing centralized digital money systems. However, one of the main barriers to scaling is the extreme burden created by forcing all users to perform all functions. It is