Peer-to-peer (P2P) computing or networking is a distributed application architecture that partitions tasks or workloads between peers. Peers are equally privileged, equipotent participants in the application.
Peers make a portion of their resources, such as processing power, disk storage or network bandwidth, directly available to other network participants, without the need for central coordination by servers or stable hosts. Peers are both suppliers and consumers of resources, in contrast to the traditional client–server model where only servers supply, and clients consume.
The peer-to-peer (P2P) application structure was popularized by file sharing systems like Napster. The peer-to-peer computing paradigm has inspired new structures and philosophies in other areas of human interaction. In such social contexts, peer-to-peer as a meme refers to the egalitarian social networking that is currently emerging throughout society, enabled by Internet technologies in general.
What is it?
This is a special kind of network type ('network topology' is the fancy description). It describes computers that are networked to each other without a central server being in-between.
Why was it developed?
Peer-to-peer networks are very popular with people who want to share files directly with one another. The files do not have to be stored on a central server.
Software has been developed that can even put together a file from bits of the file stored across several 'peers' on the network. For example, BitTorrent can do this. The advantage is that no single computer needs to be over-loaded when a very popular / very large file is requested.
Why is it important?
It is an important development, because it will affect the way the Internet is used in the future.
Many companies want to provide 'video on demand' services, but the problem has been how to provide the vast bandwidth needed when thousands of people are asking for the same video file, e.g., the latest episode of Lost or 24.
Peer-to-peer is an ideal solution to the problem, because hundreds of computers can hold parts of the video and so share the load.
Some companies are calling the peer-to-peer connections they are building 'The Grid' which is a trendier name for the same thing.
What about the future?
In the near future, high definition television programs may be delivered through the Internet and so peer-to-peer may be used.