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In unstructured P2P networks there is a possibility of malicious codes and false transactions. It generates the false identities in order to perform false transactions with other identities. The proposed method uses the concept of DHT and reputation management which provides efficient file searching. The self certification (RSA and MD5) is used for ensuring secure and timely availability of the reputation data of a peer to other peers. The reputations of the peers are used to determine whether a peer is a malicious peer or a good peer. Once the malicious peer is detected the transaction is aborted. The reputation of a given peer is attached to its identity. The identity certificates are generated using self-certification and all peers maintain their own (and hence trusted) certificate authority which issues the identity certificate(s) and digital signature to the peer.