Here on the blog we like to address questions people often have about how we work. One of the terms which sometimes provokes questions is ‘peer to peer’. CurrencyFair offers peer-to-peer (P2P) money transfers and currency exchange. This means that we bring together a network of users, each offering to individually trade money, rather than providing a ‘client/server’ relationship with us at the centre. Our role, as a regulated entity, is to provide security and convenience. We ensure that you can exchange safely, and that your money gets where it needs to go efficiently and quickly. So what is peer-to-peer? You’ve probably heard the phrase used before in relation to file sharing and torrenting. Music piracy and peer-to-peer often come up in the same breath, so we’re never surprised if people are suspicious! But P2P technology is also at the heart of some perfectly legal services, and has experienced something of a renaissance in recent years. Peer-to-peer (p2p) computing distributes tasks on an individual basis, making up a network of individual nodes. A peer partaking in this network will both supply and consume resources across the network. Advantages include that P2P networks are more reliable, due to the lack of central administration, as well as keeping costs low due to crowdsourcing their own maintenance. P2P first began to be used in the early nineties, powering file-sharing services like LimeWire, Bearshare and KaZaA (as readers raised in the 90s might well remember!) and torrenting services BitTorrent and Gnutella. It really hit the headlines with Napster, the file-sharing system famously created by Sean Parker in 1999 and promptly shut down by an angry music industry. But peer-to-peer has numerous other, legal uses. Skype, for example, uses a hybrid of peer-to-peer and client-server systems. Peer-to-peer lending is increasingly common: sites like Lending Club and Prosper.com connect individuals seeking funds with others able to lend money in return for interest, effectively turning individual users into banks. And then there’s Bitcoin. The internet currency famously lacks any central authority, relying instead on the wider collective network to track transactions and issue new money by itself. In Bitcoin’s case, the network act as witnesses to each transaction: every transaction is broadcast to them to insure that each Bitcoin can only be spent once. Sites like Ebay and home rental service AirBnB come under the umbrella of P2P ‘collaborative consumption’. Peer-to-peer marketplaces have experienced a boom in recent years, with services such as P2P labour market TaskRabbit, which allows anyone to source for freelance workers for small tasks, or to find work for themselves. Car-sharing services ZipCar and Wheelz do the same thing for carpools, while Zaarly helps connect shoppers with local industry. And finally… CurrencyFair allows you to outwit the banks with a safe and secure money Exchange, another example of P2P putting power into the public’s hands! Is peer-to-peer the future of shopping, travel, hospitality and… banking? Only time will tell. But it’s certainly come a long way.