Over the years, large-scale peer-to-peer networks such as Kazaa and eMule have enjoyed significant popularity, as users scrambled to download the latest Madonna and Metallica albums without paying a penny. More recently, "Torrents" have also appeared, adding a similar system to the downloading craze, with music and movie fans enjoying free content with just a few clicks.

All of this, though, has resulted in swift protest by armies of lawyers representing both music interests (the RIAA most notably) as well as Hollywood's top movie studios. Individual consumers, "downloaders" of illegal (free) content, have been hit with lawsuits, and have been resigned to pay significant fines as a result of their use of peer-to-peer. Many of these claims have been as high as $5,000.

Now, though, the cat and mouse game appears to be headed for a dead halt as consumers have discovered a new breed of peer-to-peer systems that encrypt all exchanges. This means that not even an ISP can identify the content that's being exchanged, and so intellectual property owners will be unable to enforce the laws that protect copyright owners.

An example of such an application, GigaTribe, has taken Europe by storm and is now poised to become one of the most common P2P solutions in the US. Unlike other software applications, with GigaTribe users don't exchange files with millions, they exchange and share files with small communities of friends and family. However, this new application lets users select specific folders on their harddrives that they want to share, and friends in the network can browse through these folders, and download large files (even entire folders) with ease. Also enticing, is the fact that members of a private network, where people more or less know each other, are unlikely to be sharing corrupted, or "fake" files, such as those injected into file sharing networks by record companies. A number of other companies have followed suit, and have launched similar offerings.

This sort of private P2P business is also redefining the way individuals communicate, as it eliminates the need for complicated FTP applications when users need to send someone a large file. Chat features are also common, and allow users to describe where to find certain files, as well as what files are available on a user's harddrive. Users can also set up these applications to access their own computers from remote locations.

Amidst all of these developments, it is unclear how the record companies and movie studios will respond. It is especially unclear whether they can respond at all, considering that it is technically impossible to "crack" encrypted exchanges and that any attempt to invade the privacy of small communities will be met with vehement protests, and possible boycotts of cultural products. Perhaps these new (and private) peer to peer systems will become as acceptable as, say, lending a CD to a friend down the street.