The Internet Protocol (IP) has two versions currently in use (see IP version history for details). Each version has its own definition of an IP address. Because of its prevalence, "IP address" typically refers to those defined by IPv4.
 IP version 4 addresses
IPv4 uses 32-bit (4-byte) addresses, which limits the address space to 4,294,967,296 (232) possible unique addresses. However, some are reserved for special purposes such as private networks (~18 million addresses) or multicast addresses (~270 million addresses). This reduces the number of addresses that can be allocated as public Internet addresses, and as the number of addresses available is consumed, an IPv4 address shortage appears to be inevitable in the long run. This limitation has helped stimulate the push towards IPv6, which is currently in the early stages of deployment and is currently the only contender to replace IPv4.
IPv4 addresses are usually represented in dotted-decimal notation (four numbers, each ranging from 0 to 255, separated by dots, e.g. 220.127.116.11). Each range from 0 to 255 can be represented by 8 bits, and is therefore called an octet. It is possible, although less common, to write IPv4 addresses in binary or hexadecimal. When converting, each octet is treated as a separate number. (So 255.255.0.0 in dot-decimal would be FF.FF.00.00 in hexadecimal.)
 IPv4 address networks
In the early stages of development of the Internet protocol,  IP addresses were interpreted as structures of network numbers and host numbers, with the highest order octet (first eight bits) of an IP address designating the "network number", and the rest of the bits (called the "rest" field) used for host numbering within a network. This method soon proved inadequate as local area networks developed that were not part of the larger networks already designated by a network number. In 1981 IP protocol specification was revised with the introduction of the classful network architecture. 
Classful network design allowed for a larger number of individual allocations. The first three bits of the most significant octet of an IP address were used to imply the "class" of the address instead of just the network number and, depending on the class derived, the network designation was based on octet boundary segments of the entire address. The following table gives an overview of this system.
|Class||First octet in binary||Range of first octet||Network ID||Host ID||Possible number of networks||Possible number of hosts|
|A||0XXXXXXX||0 - 127||a||b.c.d||128 = (27)||16,777,214 = (224 - 2)|
|B||10XXXXXX||128 - 191||a.b||c.d||16,384 = (214)||65,534 = (216 - 2)|
|C||110XXXXX||192 - 223||a.b.c||d||2,097,152 = (221)||254 = (28 - 2)|
While being a successful developmental stage, classful network design proved unscalable in the rapid expansion of the Internet and was abandoned in 1993 when Classless Inter-Domain Routing (CIDR) was introduced (RFC 1517, RFC 1518, RFC 1519) to define a new concept of allocation of IP address blocks and new methods of routing protocol packets using IPv4 addresses. CIDR is based on variable-length subnet masking (VLSM) to allow allocation on arbitrary-length prefixes.
Today, remnants of classful network concepts are used only in a limited scope as the default configuration parameters of some network software and hardware components (e.g. netmask).
 IPv4 private addresses
Computers not connected to the Internet (e.g., factory machines that communicate with each other via TCP/IP) need not have globally-unique IP addresses. Three ranges of IPv4 addresses for private networks, one range for each class, were reserved in RFC 1918; these addresses are not routed on the Internet, and thus need not be coordinated with an IP address registry.
|IANA Reserved Private Network Ranges||Start of range||End of range||Total addresses|
|24-bit Block (/8 prefix, A)||10.0.0.0||10.255.255.255||16,777,216|
|20-bit Block (/12 prefix, B)||172.16.0.0||172.31.255.255||1,048,576|
|16-bit Block (/16 prefix, C)||192.168.0.0||192.168.255.255||65,536|
Each block may be used as needed by anyone and typically a network administrator will divide a block into subnets; for example, many home routers automatically use a default address range of 192.168.0.0 - 192.168.0.255 (192.168.0.0/24).
 IP version 6 addresses
IPv6 is the next generation of the Internet Protocol, designed to replace IPv4 on the Internet. Addresses are 128 bits (16 bytes) wide, which, even with a generous assignment of network blocks, will more than suffice for the foreseeable future. The new address space provides a maximum of 2128, or about 3.403 × 1038 unique addresses. The utilization of this large address space is designed in a fashion that provides more efficient route aggregation across the network world-wide.
Example of an IPv6 address: 2001:0db8:85a3:08d3:1319:8a2e:0370:7334
Writing for Technology Review in 2004, Simson Garfinkel wrote that there will exist "roughly 5,000 addresses for every square micrometer of the Earth's surface". This enormous magnitude of available IP addresses will be sufficiently large for the indefinite future, even though mobile phones, cars and all types of personal devices are coming to rely on the Internet for everyday purposes.
The above statement, however, involves a common misconception about the IPv6 architecture. Its large address space is not intended to provide unique addresses for every possible point. Rather, the addressing architecture is such that it allows large blocks to be assigned for specific purposes and, where appropriate, to be aggregated for providing efficient routing. With a large address space, there is not the need to have complex address conservation methods as used in classless inter-domain routing (CIDR).
Windows Vista, Apple Computer's Mac OS X, all modern Linux distributions, and an increasing range of other operating systems include native support for the protocol, but it is not yet widely deployed in other devices.
 IPv6 private addresses
Just as there are addresses for private, or internal networks in IPv4, there are blocks of addresses set aside in IPv6 for private addresses. In IPv6, these are referred to as unique local addresses (ULA). RFC 4193 sets aside the routing prefix fc00::/7 for this block. The addresses include a 40-bit pseudorandom number that minimize the risk of address collisions if sites merge or packets are misrouted.
Early designs (RFC 3513) used a different block for this purpose (fec0::), dubbed site-local addresses. However, the definition of what constituted 'sites' was unclear, and the poorly defined address structure created ambiguities for routing. The address range specification was abandoned and must no longer be used in new systems.
Addresses starting with fe80: are called link-local addresses and are routable only in the local link area. The addresses are assigned automatically by the operating system's IP layer for each network interface. This provides instant network connectivity for any IPv6 host and means that if several hosts connect to a common hub or switch, they have an instant communication path via their link-local IPv6 address.
None of the private address prefixes may be routed in the public Internet.
 IP address subnetworks
Subnetting is a technique that can be used in both IPv4 and IPv6 networks. The IP address is divided into two parts: the network address and the host address. The subnet mask determines how the IP address is divided into network and host parts.
As an alternative to the subnet mask, CIDR notation can also be used. In CIDR notation, the IP address is followed by a slash and the number of bits used to designate the prefix length, i.e., the network part. For example, a typical IP address and its subnet mask may be 192.0.2.1 and 255.255.255.0, respectively. The CIDR notation for the same IP address and subnet is 192.0.2.1/24, because the first 24 bits of the IP address indicate the subnetwork.
 Static and dynamic IP addresses
When a computer is manually configured to use the same IP address each time it powers up, this is known as a Static IP address. In contrast, in situations when the computer's IP address is assigned automatically, it is known as a Dynamic IP address.
 Method of assignment
Static IP addresses are manually assigned to a computer by an administrator. The exact procedure varies according to platform. This contrasts with dynamic IP addresses, which are assigned either randomly (by the computer itself, as in Zeroconf), or assigned by a server using Dynamic Host Configuration Protocol (DHCP). Even though IP addresses assigned using DHCP may stay the same for long periods of time, they can generally change. In some cases, a network administrator may implement dynamically assigned static IP addresses. In this case, a DHCP server is used, but it is specifically configured to always assign the same IP address to a particular computer, and never to assign that IP address to another computer. This allows static IP addresses to be configured in one place, without having to specifically configure each computer on the network in a different way.
In the absence of both an administrator (to assign a static IP address) and a DHCP server, the operating system may assign itself an IP address using state-less autoconfiguration methods, such as Zeroconf. These IP addresses are known as link-local addresses. For IPv4, link-local addresses are in the 169.254.0.0/16 address range.
In IPv6, every interface, whether using static or dynamic address assignments, also receives a local-link address automatically in the fe80::/64 subnet.
 Uses of dynamic addressing
Dynamic IP Addresses are most frequently assigned on LANs and broadband networks by Dynamic Host Configuration Protocol (DHCP) servers. They are used because it avoids the administrative burden of assigning specific static addresses to each device on a network. It also allows many devices to share limited address space on a network if only some of them will be online at a particular time. In most current desktop operating systems, dynamic IP configuration is enabled by default so that a user does not need to manually enter any settings to connect to a network with a DHCP server. DHCP is not the only technology used to assigning dynamic IP addresses. Dialup and some broadband networks use dynamic address features of the Point-to-Point Protocol.
 Uses of static addressing
Static addressing is essential in some infrastructure situations, such as finding the Domain Name Service directory host that will translate domain names to IP addresses. Static addresses are also convenient, but not absolutely necessary, to locate servers inside an enterprise. An address obtained from a DNS server comes with a time to live, or caching time, after which it should be looked up to confirm that it has not changed. Even static IP addresses do change as a result of network administration (RFC 2072)
 Modifications to IP addressing
 IP blocking and firewalls
Firewalls are common on today's Internet. For increased network security, they control access to private networks based on the public IP of the client. Whether using a blacklist or a whitelist, the IP address that is blocked is the perceived public IP address of the client, meaning that if the client is using a proxy server or NAT, blocking one IP address might block many individual people.
 IP address translation
IP addresses can appear to be shared by multiple client devices either because they are part of a shared hosting web server environment or because an IPv4 network address translator (NAT) or proxy server acts as an intermediary agent on behalf of its customers, in which case the real originating IP addresses might be hidden from the server receiving a request. A common practice is to have a NAT hide a large number of IP addresses in a private network. Only the "outside" interface(s) of the NAT need to have Internet-routable addresses.
Most commonly, the NAT device maps TCP or UDP port numbers on the outside to individual private addresses on the inside. Just as there may be site-specific extensions on a telephone number, the port numbers are site-specific extensions to an IP address.
In small home networks, NAT functions are usually performed by a residential gateway device, typically one marketed as a "router". In this scenario, the computers connected to the router would have 'private' IP addresses and the router would have a 'public' address to communicate with the Internet. This type of router allows several computers to share one public IP address.
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