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Microsoft says that Avalanche improves on BitTorrent's method of 'swarming' otherwise known as parallel downloads. In a system where files are shared among multiple machines, if there is only a single source for the file, downloads are restricted to the bandwidth of the single server.

To combat this problem, p2p networks introduced the concept of swarming. Once a file has downloaded a bit of data, it is instantly made available to the network so that other machines can download it, and so the more machines downloading the software, the faster it actually becomes.

The problem is that of the 'rarest bit'. Despite being able to download the great majority of a file, it is not complete until the last bit, which may still be only on a single machine, can be slotted in. One technique used by P2P networks is exchange of 'locally rarest' bits, which will speed up some of the downloads.

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However, according to Microsoft, this does not solve the problem of the 'globally rarest' bit.

Microsoft's researchers in Cambridge think they have cracked the problem by implementing something they call network coding. Unlike existing P2P systems where peers offer the blocks of the file, in Avalanche, a computer offers other peers any combinations of the blocks it has already.

These combinations are sent out together with tags that describes where the constituent blocks fit in the overall scheme. Microsoft says that any peer can generate new unique combinations from the combinations it already has. When the PC has enough combinations, it can put the pieces together to create the original file.

As a result, any bit uploaded by a given peer can be of use to any other peer. Peers do not need to search out the next block to build the file, any encoded piece will suffice. Redmond says that this makes the system very robust as peers disconnect and no peer becomes a bottleneck, since no block is more important than another. Finally, Microsoft says that network bandwidth is reduced since the same information does not travel multiple times over bottleneck links.

Microsoft sees the technology applied to video and TV on demand as well as the distribution of films either to buy or to rent. According to sources, Avalanche will have built in DRM to protect the rights of the copyright holders.

It is thought that trials of Avalanche may begin in the 2006.