A peer-to-peer network is a decentralized network model offering no centralized storage of data or centralized control over the sharing of files or resources. All systems on a peer-to-peer network can share the resources on their local computer as well as use resources of other systems.
Peer-to-peer networks are cheaper and easier to implement than client/server networks, making them an ideal solution for environments in which budgets are a concern. The peer-to-peer model does not work well with large numbers of computer systems. As a peer-to-peer network grows, it becomes increasingly complicated to navigate and access files and resources connected to each computer because they are distributed throughout the network. Further, the lack of centralized data storage makes it difficult to locate and back up key files.
Peer-to-peer networks are typically found in small offices or in residential settings where only a limited number of computers will be attached and only a few files and resources shared. A general rule of thumb is to have no more than 10 computers connected to a peer-to-peer network.