Insights Peer-to-peer platforms in the metaverse

The metaverse offers new experiences and services that will enable users to interact more quickly, seamlessly, and at a lower cost. Decentralisation will be a key focus to enable interoperability and scalability in this virtual world. The experiences and services in the metaverse will also need to reflect this decentralised approach.

Peer-to-peer (P2P) systems backed by distributed ledger technology (DLT) can provide a solution to this challenge in many ways. As excitement grows around Web 3.0, we can expect that decentralisation will be a pervasive feature of the metaverse. DLT-based P2P platforms will allow buyers and sellers to interact directly without the need for a central authority, could provide a decentralised approach to transactions in the metaverse and present a truly Web3-native community building, experience-sharing platform. This could mean that anything from social media networks to virtual marketplaces and even payment services could be available on P2P platforms.

One of the most well-known examples of a Web2 P2P network is Napster, the file-sharing platform that let users share and download music files. While Napster was incredibly disruptive, it was eventually shut down by regulators for failing to protect the legal rights of content creators.

Since then, the P2P framework has been used for various purposes, including the decentralised virtual currency Bitcoin. Bitcoin added a new dimension to the P2P model by using blockchain technology to underpin transactions and transfer value. By creating an unchangeable record of transactions, blockchain technology made P2P networks more secure and removed the need for third-party intermediaries in the payments world.

The applications of P2P blockchain technology have continued to evolve, being used in finance, gaming, real estate, and even ride-sharing. In the metaverse, P2P blockchain applications would enable even more opportunities for decentralisation.

Applying P2P to Web3 brings with it several opportunities:

  1. Content. Traditional platforms that use a centralised approach to content sharing often struggle with high storage costs, but P2P networks are more cost-effective.[1] Distributed ledger technology (DLT), the technology that blockchain is based on, gives P2P networks a truly decentralised backend and can provide an alternative approach to content storage.[2] A DLT-backed P2P content platform can allow users to host content locally across the network instead of relying on a central server, reducing the storage burden and improving efficiency. Users can also be rewarded for hosting content, further incentivising the P2P model.[3] In a single metaverse world with a large number of users creating, consuming, and sharing content, P2P content platforms could offer many of the benefits that will be essential for the success of such platforms in the vast metaverse
  2. Sharing economy. DLT-based P2P platforms could enable people to directly rent out their assets, such as cars or houses, without the need for a central authority to facilitate the transaction. This could be extended to completely digital assets that exist in particular metaverses. This would lead to lower fees and more efficient use of resources without profits being retained by a centralised authority.
  3. Interactive entertainment. P2P networks could allow for the creation of decentralised virtual worlds, where users have greater control over their in-game assets and can directly interact with other players without the need for a central server. This will create more immersive and interactive gaming experiences, engaged communities and token economics opportunities that can be ported between games entirely within the user’s control.
  4. Music. P2P networks allow musicians to connect directly with their fan community and distribute their music directly without needing a central ownership or licensing authority. DLT-based P2P networks could also be used to secure and authenticate music ownership, access rights and facilitate royalty streams managed immutably on-chain.[4]
  5. Social media. By allowing users to directly connect with each other and share content without the need for a central authority, P2P social media platforms could provide a more decentralised and privacy-friendly alternative to traditional social media networks.[5] This gives users greater control over their data and a more equitable distribution of value within the social media ecosystem. Additionally, the immutable nature of P2P networks, enabled by blockchain technology, could improve the authenticity of content shared on social media. Actions on a P2P social media platform would be fully traceable on the blockchain, making it harder for users to spread false information or engage in other forms of malicious behaviour.

P2P networks however also give rise to a number of challenges:

  1. Enforcement and the absence of a central authority. In traditional centralised networks, a central authority is responsible for enforcing rules and regulations, and can be held accountable for any failures to comply with these rules. In a P2P network, there is no central authority, which makes it more difficult to regulate illegal activities or enforce terms and conditions. This can create legal challenges and may make it harder for P2P networks to gain the trust of users. There may also be issues with data protection and IP enforcement, given the immutable nature of P2P networks. For P2P platforms with non-centralised networks, it could be possible to address liability and create a coherent set of terms and conditions by imposing rules on protocols that would regulate activity on the blockchain. However, it remains to be seen how this would work in practice on the scale that would be needed in a fully decentralised metaverse.
  2. Privacy and immutability. Because transactions on a blockchain are transparent and publicly accessible, it may be possible for third parties to track and trace the activities of users on a P2P network. This could potentially compromise the privacy of individuals, particularly if sensitive personal or financial information is involved. The immutable nature of blockchain technology, which is a key feature of P2P networks, can also create challenges. For example, in the context of data protection, the right to erasure is incompatible with a system that makes it impossible to alter information on the blockchain. In IP enforcement, the unalterable nature of P2P networks can create significant hurdles when content is used without the permission of the rights holder.

Web3 P2P networks have the potential to disrupt many industries by providing a decentralised alternative to traditional centralised platforms that aligns with the decentralised digital ethos of the metaverse. P2P networks will play a key role in realising the communities and experiences promised by the metaverse, while at the same time offering a means for providers to share products and services with consumers (and each other) at lower costs, greater efficiency, and demonstrating a more equitable distribution of value.


[1] AWS, for example, provides data storage for Netflix, Disney+, HBO Max, Discovery+ and Hulu.

[2] The Aioz Network rewards users for hosting streamable content, which is then delivered to other users from local hosts rather than a central server. Chainflix also provides an example of a platform that encourages users to assist with hosting content in return for a reward, in this case users can earn Chainflix coins.

[3] Flixxo rewards members of the network for providing other users with access to the media on their computers.

[4] Acquired by Spotify in 2017, MediaChain issues on-chain unique IDs for each piece of music content and provides musicians with smart contracts, allowing artists to handle their royalties directly.

[5] Aether is a decentralised P2P platform for self-governing communities, similar to Reddit. It provides a network where every user can see what they have received from the network, what algorithm is used to calculate their feed and the integrity of user’s posts is guaranteed by cryptographic proofs of work, meaning that nobody else can alter content without the user’s knowledge.