Overlay networks are a collection of nodes that form a virtual network on top of the normal routing infrastructure of the Internet. These virtual networks allow nodes to organize themselves for the purpose of transferring data in a robust manner. Overlay networks, and in particular Peer-to-Peer (P2P) systems, have become very popular as
they provide scalable services for content distribution. However, many P2P systems have been oblivious to network locality, thus causing an increase in the amount of traffic that must leave an Internet Service Provider (ISP). P2P localization has then been proposed as a solution to contain traffic to within an ISP. In this dissertation, we first study the economic impact of actually deploying localization at an Internet-wide scale. We then consider how insider attackers can disrupt localization services and study how to protect such services from attacks. Finally, as insiders can also attack the overlays that utilize localization, we propose defenses for mitigating attacks in a high-bandwidth P2P streaming system.