Why Do Educational Institutions Have So Many IPv4 Addresses?
In the internet’s early days, it was primarily a tool for research and education. The IPv4 protocol has 4.3 billion addresses, which was seemingly infinite for its use at the time. IP address blocks were granted for free to colleges and universities in ample quantities.
Many educational institutions still possess blocks of 65,000 IPv4 addresses, of which only a small fraction are often used. IP addresses are valuable assets – valued at around $50 each – and often deemed surplus assets. Thus, it is common for large institutions to sell IPv4 blocks to raise funds.
What are IPv4 Addresses?
Internet Protocol (IP) is a crucial framework that enables the seamless transfer of data through networks to reach its intended destination. To connect to the internet, each device must have a unique IP address.
IPv4 is the fourth version of the internet protocol. Developed by the U.S. Department of Defense in the 1980s, it became the driving force in the growth of the internet.
40 years later, after massive growth in the internet, IPv4 supply is running out. So the internet is gradually transitioning to IPv6, the next iteration of the protocol, which has many more addresses, but its own obstacles.
In the world of packet-switched networks, IP packets are the building blocks of data transmission. These packets, containing vital information, are routed through the network from a source host to a destination host based on their respective IP addresses.
An IP address consists of two parts: one identifies the individual device, while the other identifies the network it belongs to. TCP/IP uses a subnet mask to distinguish between these two components.
IP Address Blocks and Registries
While individual IP addresses are assigned to a specific device, they are transferred in blocks. IPv4 blocks range in size from 256 address (called a /24), to over a million addresses (/12). The blocks are registered in global registries, based on location in the world. In the United States, the registry is ARIN (American Registry for Internet Numbers), in Europe it is RIPE (Réseaux IP Européens). and in Asia, it’s APNIC (Asia Pacific Network Information Centre), and so on.
Internet registries ensure rightful ownership of IP address blocks, and govern their transfer when they are sold.
Functions of IP Addresses from a Tech Standpoint
IP addresses serve the essential task guiding data packets as they travel through the internet. This ensures that each packet lands in the right destination. Every internet-connected location, from your phone to Google’s search page, has a unique IP address.
Data packets traverse from one machine to another under the guidance of routers. These routers analyze the IP information within each packet and direct them closer to their intended destinations. This process relies on each router’s information table, which accurately determines the most efficient route for each packet.
The Evolution and Limitations of IP Protocols
Internet Protocol Version 4 – IPv4 – was first deployed in 1982, and was the standard internet protocol used until IPv6 came along in 2006. IPv4 is still the dominant internet protocol, due to its ease of deployment and extensive use.
IPv4 uses a quad-dotted addressing system, with four numbers ranging from 1 to 255, and dots in between. Represented like this 172.16.254.1. This represents a 32 bit number, with a total capacity of roughly 4.3 billion addresses.
The limited capacity of IPv4 made it necessary to create a protocol with a larger capacity, as internet usage grew.
IPv6 – the next generation – was introduced in 2006, with a potential number of addresses that is orders of magnitude greater than IPv4 – 340 undecillion addresses. That’s 340 followed by 36 zeroes. Which is essentially infinite for any use of the internet we can imagine at this point.
Composed of 8 groups of 16 bits, totaling 128 bits, IPv6 addresses are much longer than IPv4. They are they are represented as four hexadecimal digits, separated by colons. This is an example IPv6 address; 2001:0db8:0000:0000:0000:ff00:0042:8329.
Even though the IPv6 protocol is close to 20 years old, IPv4 has stuck around, and is considered preferable to use in many cases, due to its relative simplicity.
Scarcity Makes IPv4 Valuable
IPv4’s design allows for a maximum of 4,294,967,296 unique addresses, which is fewer than the number of people in the world.
In the early days of the internet, IP addresses were freely assigned. However, the surge in mobile phones and internet-connected devices led to a shortage of IPv4 addresses. In 2019, the last unused IPv4 addresses were sold.
This prompted the creation of marketplaces and a secondary resale market for surplus addresses. The demand for IPv4 addresses has substantially increased since 2019, with prices soaring from $18 in 2019 to as much as $60 in 2024.
How Brander Group Can Help
Every year, millions of IPv4 addresses are bought and sold, with a total of 51,000,000 addresses being traded in 2022. These addresses are exchanged in various lot sizes, ranging from smallest /24 (256 IPs) IPv4 block to millions of IP addresses. To maintain the integrity of ownership and use, a precise process is followed.
Brander Group brokers, buy’s and sell’s millions of IP addresses each year. We fully manage the entire transfer process, handle all negotiations, provide legal framework, qualify buyers and sellers, and repair issues that can arise from previous misuse of IPs, like removal from blacklists.
We maintain a marketplace IP address sales, and provide consultation and assistance to buyers and sellers seeking to engage in the private and public sale or lease of IPv4 blocks.