Beyond Web 2.0 : P2P (Peer-to-Peer)

Web 2.0, the effect of social software where collaboration and sharing are gaining importance, and its a beneficial trend of the internet. Now, people are less passive consumers of media and creating content like links, photos, contacts and text to share on their own. Facebook, MySpace, and  here on gives users both the ability to share their creations, explore the creations of others, and build online communities around them.

Online entrepreneurs have been quick to jump abort and some have had a substantial windfall, for example, Facebook has been valuated by some at $15 billion. This company has done an excellent job creating a framework to facilitate connections but I question whether such valuation is warranted.

Web 2.0: You make all the content, they keep all the revenue. – Paraphrasing post

Many believe we all should be grateful for getting these tools for free, yet these companies are not providing these services out of the goodness of their hearts, they eventually wish to profit by investing in the tools and hoping you’ll add as much content as possible and add to your social network. Usage data can be used to calculate, sculpt and deliver targetted advertising. We don’t question how television operates, that we get content for free but they sell commercials to pay for it. It appears to me that many give Web 2.0 companies greater goodwill than they would give television networks for instance, when the models are roughly analogous.,  a Web 2.0 service is also experimenting with ads, and some users (likely bloggers) just don’t see them. To’s credit, they are looking into possibly incorporating some form of sharing ad revenue, recoginizing the value of user content. At this moment, I am happy with services, but fully understand that the relationship with this blogging platform is mutually beneficial, not some altruistic gesture from In the future, I may opt for greater customization and freedom a blog would offer, at the cost of paying for a hosting service.

The P2P Model

Peer-to-Peer (P2P) is a decentralized model of computer networking, where the expense of resources such as bandwidth, storage and computer power are shared between the users instead of relying on a server to supply it for clients (server-client model). The picture below demonstrates clearly:

As you can see, the P2P model can be robust, the loss of any one of those computers will not disrupt the network. With the server model on the right, the loss of the central server would keep the other clients disconnected from one another. P2P is closer to how the world wide web was envisioned by its creator,  with each node contributing resources to the network. In the days of dial-up internet and high cost computers, that model may have been premature, yet now, in these days of much cheaper storage, fast bandwidth and computer power, the P2P model becomes increasing viable.

Some current uses of P2P

A well known example of P2P technology succeeding in the commercial area is Skype, a VOIP company (internet telephone). The technology is closed software, yet the Skype network works without a central server. The company was bought by eBay for $2 billion and its hoping to compete with larger content providers such as Google. Skype has a customer base of 115 million, a large foundation to make an impact. In addition, Skype is working on refining video conferencing and instant messaging.

The P2P model is now used in banking and supplying an alternative to banks for lending and borrowing money. Zopa is a service where people can lend and borrow while taking less money per transaction than a bank would. By cutting out the middle man, both borrowers and lenders can get better rates of interest. Zopa operates out of the UK, yet there is a similar service called Prosper working out of the US.

Obstacles to adoption of the P2P model

Skype is a hybrid P2P model as they hold a centralized index of users, so the reliance on Skype for people to connect still remains, yet they show how reliable and robust a P2P can be. Indexing and search remains a challenge for P2P networks, and so far, there hasn’t been a convincing solution to such a problem, P2P seaches are notoriously slow so Google can rest easy for a while.

The Open Source community, which has produced excellent software like Firefox, Linux and Open Office has a golden opportunity here to specialize and become the forefront of P2P technology, as commercial interests are less likely to spend resources developing an indexing and search system. It would jeopardize their ability to profit since they wouldn’t have exclusivity to user lists. Open source development is quite decentralized, and the affinity between the P2P model and free software is clear to see.

Despite the obstacles, there are many who believe (myself among them) that the P2P model can have profound societal and philosophical implications along with technological ones. One such site is the P2P Foundation, a terrific resource on exploring more deeply into ideas closely related to the P2P model such as participatory democracy.

The P2P model has enormous potential to further decentralize and democratize the internet, allowing each of us greater freedom to connect without relying on the willingness or financial capacity of some big dot com, or some small startup begging for users. Widespread usage of P2P may take us to the next stage, Web 3.0, a fully decentralized and democratized internet.


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