In this paper, we develop simple models to study the performance of BitTorrent, a second generation peer-to-peer (P2P) application. We first present a simple fluid model and study the scalability, performance and efficiency of such a file-sharing mechanism. We then consider the built-in incentive mechanism of BitTorrent and study its effect on network performance. We also provide numerical results based on both simulations and real traces obtained from the Internet. Categories and Subject Descriptors