John Borland reviews latest privacy schemes for P2P users on the Internet:

most peer-to-peer systems require some degree of openness to work at all. In order to download a song from another computer online, a file swapper's computer must make some kind of connection to it. That leaves a digital record that can be traced back to a person's Internet service provider, and from there to the account holder.

At the very least, adding anonymity to peer-to-peer systems involves a trade-off in efficiency, creating performance headaches that bring a network to its knees. Some security experts go further, arguing that privacy is impossible to achieve in a peer-to-peer network, given that the technology requires creating direct connections between computers.

"The bottom line is that you just can't be anonymous on the Internet if you're going to have some kind of peer transaction," said Mark Ishikawa, chief executive officer of BayTSP, a company that tracks and identifies file swappers for music labels and Hollywood studios. "There is this myth that you can be anonymous. You can hide, but we can get you."

Most of the newest generation of file-swapping hopefuls use some kind of encryption, scrambling files so that they become impenetrable strings of data as they are transferred online. This helps keep out some prying eyes, but most monitoring services, such as BayTSP, simply pretend to be an ordinary file-swapper, searching and downloading files instead of trying to break into the network from outside. No matter how powerful the encryption in the network, that digital handshake is required, Net experts say.

Many of the services are also moving toward Internet "proxies" as a way to mask identities. Under this model, the direct handshake between uploaders and downloaders is interrupted by a digital middleman. Instead of being downloaded directly, a file is handed off to another Web server, or passed through another set of computers, before finding its way to the downloader.

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