Umm... I don't have much experience of torrents but my understanding is video files are stored there locally (like on cloud storage). When people start watching them they start distributing the video's data peer-to-peer.
So, if a video goes viral, the large number of people watching at once allows lots of peer-to-peer activity and the instance itself doesn't run out of bandwidth.
Viewers and publishers can optionally switch off the p2p if they want and just watch directly too.
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