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IP Addresses: How they shaped the past of the Internet and what they will influence in its future

Virtually everyone in the modern business world uses the Internet, and that's why Internet Protocol (IP) addresses are of critical importance. Any device that connects to the Internet must have a unique identifier (an IP address) in order for data to be sent back and forth.

Everyone uses IP addresses, but few organisations understand them. Partly, this stems from the fact that people cannot see IP addresses – they're highly intangible. Even when the RIPE NCC allocates IP addresses to an Internet service provider, nothing physical is being distributed – merely the "right" to use a range of specific numbers.

When people get to grips with that concept, there's an even more pressing issue to comprehend. As previously discussed on ITProPortal (opens in new tab), there's a big change happening as people move to adopt IPv6, the successor standard to IPv4, and this will have an impact worldwide in a number of ways.

If businesses are not IPv6 ready, those companies could find themselves "invisible" to parts of the Internet. To answer any questions about "why" and "how" IP addresses are so important, here we'll take a look at the history of IP addresses and their significance in business.


To understand the issues surrounding IP addresses today, it's worth looking at the origins of the Internet itself. The early innovation to create the Internet rewrote the rules of telecommunications and established a new way of thinking, which continues to develop to this very day.

Arguably, one of the most important developments arose from the work of Bob Kahn and Vint Cerf. They led the development of TCP/IP – a new standard that established how data should be formatted, addressed, transmitted, routed, and received when computers talk to each other over a network. TCP/IP made it easy for separate networks to communicate with each other and exchange data - it is the technology underpinning the entire Internet.

When widespread Internet adoption began in the 1990s, it started to change the face of society and the business world. The advantages for businesses were obvious, and the opportunity to transfer data without relying on purely physical means was quickly seized upon. For example, the financial industry was transformed by this newfound ability, and electronic stock markets became commonplace.

Today, we have five Regional Internet Registries (RIRs) – of which the RIPE NCC is the oldest – that administer the allocation of number resources in their service regions. But the RIPE NCC was only formed in 1992 – so what happened before then? John Postel, another of the brilliant minds who helped shape the development of the Internet, took it upon himself to document the allocation of IP addresses and was initially writing them down in a notebook by hand! This gradually led to the creation of the Internet Assigned Numbers Authority (IANA), which started as an informal function carried out by John as part of his work at the University of Southern California, and eventually became an independent organisation overseeing global IP address allocation (and much more).

John's work was wide-ranging and establishing a log of IP addresses was only a part of it. But it was hugely important, as it meant that new allocations could be made with confidence. Without this, there is a chance that the same IP address could have been allocated more than once – resulting in an IP address conflict which, on a larger scale, would create chaos on the Internet. IANA sits at the top of the hierarchy, allocating IP blocks to the RIPE NCC and the other RIRs, who are then responsible for allocating resources in their specific service regions, according to localised policies developed by their respective communities. The global policies that govern IANA are themselves developed by the technical community, through the same bottom-up process as the RIRs'.

Without the regionalised approach that is championed by the RIRs, the Internet would be a vastly different place. You can read more about the RIRs in another ITProPortal article (opens in new tab).

Building the future

TCP/IP laid the foundations for future development, and the increasing popularity of the Internet saw IPv4 addresses being distributed quite freely. Despite being intangible, there was still a limit on how many IPv4 addresses could be given out. Due to its design, IPv4 allows for around 4.3 billion addresses only. It quickly became apparent that this limitation could result in issues for Internet users throughout the world, as well as stifling the future growth of the Internet.

At the beginning of the Internet, the 4.3 billion available IP addresses seemed more than enough to service the relatively small number of networks using them. No one could have predicted that in 30 years' time, this network of networks would have grown to include just about every business in the world, let alone that items - from thermostats through to light bulbs - could be controlled via the Internet, and therefore would require their own IP address.

The limitations of IPv4 also resulted in the development of IPv6, which has 340 trillion, trillion, trillion address spaces. Essentially, while IPv4 lasted for over thirty years before reaching its exhaustion point, IPv6 is likely to last for several lifetimes.

Due to the pressures created by the scarcity of IPv4 addresses, the technical community, who rely on it, is very active in shaping the policies that govern its distribution. In turn, this has helped to promote the shared values of openness and cooperation across the Internet, as people work together to conserve IPv4 while simultaneously continuing to expand the reach of the Internet.

The future is IPv6

IPv6 is critical (opens in new tab) for the growth of the Internet, and for the many businesses and economies that are tied into it. It's of huge importance that businesses understand IPv6 and ensure they are prepared for the future because IPv4 and IPv6 are not compatible – devices using one or the other cannot directly communicate with each other.

This means that there's little point in updating hardware if it is only IPv4-based because, if other businesses or customers are using IPv6, your business will effectively be invisible. Every business should consider their upgrade cycles, and ask their hardware providers about IPv6 compliance and 'dual-stacking' - where a device can handle both IPv4 and IPv6.

You wouldn't pay for advertising and then voluntarily choose to exclude a (small, but rapidly growing) portion of your target audience. It's the same with IP addresses. To maximise the number of people you can speak to - and who can contact you - it's important to account for IPv6 in your planning.

IPv6 also solves an interesting dichotomy that troubled the industry for some time. When distributing IPv4, there was always a tension between the opposing goals of conservation (preserving the free pool of IPv4 by making smaller allocations) and aggregation (giving people larger, contiguous blocks so that the growth of the routing table could be limited). The staggering amount of available addresses in IPv6 means that the goal of conservation is no longer as pressing, and large aggregatable blocks can be given out.

Without IPv6, technology such as smartphones will be limited to small sections of society over the coming years, rather than be an essential part of everyday business life. However, thanks to network operators around the world, who are adopting the new IP standard on their networks, every business – from multinational conglomerates through to sole traders – will continue to benefit from having instantaneous access to the world's information.