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Skype is a peer-to-peer (P2P) overlay network for VoIP and other applications, developed by KaZaa in 2003. Skype can traverse NAT and firewall more efficiently than traditional VoIP networks and it offers better voice quality. To find and locate users, Skype uses “supernodes ” that are running on peer machines. In contrast, traditional systems use fixed central servers. Also Skype uses encrypted media channel to protect the dada. The main contribution of this article is illustrating the architecture and components of Skype networks and basically analyzing key Skype functions such as login, NAT and firewall traversal. Furthermore, it contains comparisons of Skype networks with VoIP networks regarding different scenarios. On that basis it reveals some reasons why Skype has much better performance than previous VoIP products