In 1979 Usenet was developed by two Duke University graduate students and one from the University of North Carolina to exchange information in the Unix community. Based on Unix-to-Unix-copy protocol, or UUCP, one Unix machine would automatically dial another, exchange files with it, and disconnect. Students at the two universities could post “news” on certain topics, read messages within that topic, and exchange the messages between the two schools. Usenet grew from the original two sites to hundreds of thousands of sites but retained the same basic model of peer-to-peer networking. A Usenet site joins the rest of the world by setting up a news exchange connection with at least one other news server on the Usenet network. Typically exchange is provided by a company’s ISP. The company’s news server contacts the ISP's news server, and they exchange messages on a regular schedule.

Usenet has evolved some of the best examples of decentralized control structures on the Net because there is no central authority in control. Newsgroups are added to the main topic hierarchy through a democratic process, using the Usenet group news.admin to propose and discuss the creation of new groups. Anyone with an email address may submit an email vote on the proposal, after it has been proposed and debated for a set period of time. If a newsgroup vote passes, a new group message is sent and propagated through the Usenet network.

Usenet is in fundamentally the grandfather of today's peer-to-peer applications like Gnutella in that it is a system that copies files between computers without central control. Developers of new peer-to-peer applications rely on lessons learned in the more than two decades that Usenet has been in existence.

The peer-to-peer networks that are being used by companies today and that will be used in the future only started to be developed around 15 years ago. Aerospace manufacturer Boeing, oil company Amerada Hess and computer chip manufacturer Intel were among the first corporations to adopt peer-to-peer technology as it was developed. Intel has been using the technology since 1990 to cut the cost of chip design. The company uses a system they developed called NetBatch to more than 10,000 computers across 25 worldwide Intel locations to run computer simulations, giving its engineers access to globally distributed processing power. In a speech in August 2000, Pat Gelsinger, Intel's chief technology officer, said they had eliminated new mainframe purchases within two years of adopting NetBatch and have saved an estimated $500 million over the decade that it had been in use.

Peer-to-peer networks were developed throughout the 90s and were used mostly for in-house purposes for single companies the companies and in other limited fashions to share information between cooperative researchers. When the internet began to explode in the mid-90s, the Internet became less of a peer-to-peer network. A new wave of ordinary people began to use the internet as a way to exchange email, access web pages, and buy things, which was much different from the quiet geek utopia it had once been. The equal sharing of information over the Internet quickly shifted into a mostly downstream medium, like television and newspapers. Developers and Web architects often assumed this change was permanent and created systems that did not allow for peer-to-peer exchange. While these networks still existed, they took a backseat to the client/server and one-way communication of the Internet explosion.

This Internet climate began to shift back to peer-to-peer with the development, popularity, and attention given to Napster. Napster was developed by Shawn Fanning while a freshman at Northeastern University and was introduced in May 1999. Members of the Napster community could download a free program that searched the local hard disks of other users for MP3 files and then were able to download these files directly from other peers. By the end of the year, Napster boasted membership in the millions, thanks to word of mouth advertisement at college and universities worldwide.

As Napster became more popular, recording artists, labels and the Recording Industry Association of America (RIAA) began to campaign to have Napster banned from computer on college campuses because they claimed Napster users violated copyright laws by “stealing” music. The RIAA sued Napster in December 1999 which was followed by the rock band Metallica filing a lawsuit against the company in April 2000. After long legal battles and a failed attempt to become a pay-based service, Napster stopped operation in July 2001, but not before reigniting the peer-to-peer craze.