IPWAY Blog

Before IPv4 and IPv6, there were the 60’s. Back then, Internet started as a solution to share information of the American governmental researchers. Another important piece in the Internet evolution was the Cold War. The launch of the Sputnik satellite by The Soviet Union led the U.S. Defense Department to look for a solution so that information could still be disseminated even after a nuclear war. And this is the way ARPANET (Advanced Research Projects Agency Network) was born. 

ARPANET is the network that was limited to academic organisations that were collaborating with the Defence Department and in time it evolved to what we know today as the Internet. But still, the birthday of the Internet is considered to be January 1st, 1983 when Transfer Control Protocol/Internet Protocol (TCP/IP) enabled different networks to speak the same language and communicate one with another.

The birth of IPv4

Internet Protocol version 4 is the 4th version of the Internet Protocol and it was the first version put in production on SATNET in 1982 and ARPANET in 1983. IPv4 brought in use a 32-bit address space, meaning 4,294,967,296 (232) unique addresses that appeared at that time. Back then, this was an enormous number of resources that was supposed to cover the needs of the Internet network’s development. 

IANA organization (Internet Assigned Numbers Authority) was established in 1988 and it was founded from the need of having a responsible authority that could ensure a proper management of the address space. IANA delegates Internet resources to the RIRs (Regional Internet Registries) which, in turn, follow their regional policies to delegate resources to their customers, which include Internet service providers and end-user organizations. RIRs were established between 1992 and 2005, as non-profit organizations and their main goal was the conservation of address space for certain geographic areas:

• RIPE for Europe in 1992;
• APNIC for the Asia-Pacific in 1993;
• ARIN for the North-Americans in 1997;
• LACNIC for Latin America in 2002;
• AFRINIC for Africa in 2005. 

The depletion process begins

As Internet growth exploded, IANA predicted that the available pool of IPv4 addresses would be exhausted in just a few years. As of the dates below, all RIRs have exhausted their top-level IPv4 addresses:

IPv4 address scarcity has become reality and this problem still requires special approaches. Generally we can consider three possible solutions for this problem: 

1. Develop more address space by adopting IPv6; 
2. Multiplex current IPv4 address space using address sharing techniques such as Carrier-grade NAT (CGN);
3. More efficient use of the current IPv4 address space.

Enter IPv6, the promise of next gen networking

Internet Protocol version 6 (IPv6) is the most recent version of the Internet Protocol (IP). It  was developed by the Internet Engineering Task Force (IETF) to deal with the long-anticipated problem of IPv4 address exhaustion in order to replace IPv4 in time. IPv6 uses 128-bit addresses, theoretically allowing 2^128, or approximately 3.4×1038 total addresses. For an in-depth analysis of IPv4 and IPv6 characteristics, head to our previous article.

IPv6 adoption should solve some issues of IPv4 and offer advantages like more efficient routing, better packet processing, increased security, improved performance and end-to-end transparency. IPv6 also enables ISPs to reduce their routing tables by making them more hierarchical. 

But why do we still use IPv4?

Even if the future seems to be the transition to IPv6, still most of the organisations do not have IPv6 on their to do list. There are several reasons why this transition is not yet happening. 

One of these reasons is the cost of the new infrastructure. There are millions of routers and switches all over the Internet. Not all equipment is compatible with IPv6 and there is a financial impact in changing it.  

Another reason that slowed down the transition to IPv6 is that NAT (Network Address Translation) has already been used all over the internet, extending the lifetime of the IPv4 protocol. It’s a way to map multiple local private addresses to a public one before transferring the information. Organizations that want multiple devices to employ a single IP address use NAT, which can be deployed incrementally in the Internet at a low cost and it provides at the same time basic security.

The fact that there is no compatibility between IPv4 and IPv6 makes them work concurrently in the operators networks. The aspects that must be taken into consideration are higher costs of maintenance while the benefits become visible only when the switch to IPv6 is done. So, who is going to switch to IPv6 as long as none of its contacts did it?

Considering all of this, how can we manage to keep IPv4 alive?

Since the migration to IPv6 is not going to happen soon, it seems that other creative solutions should be adopted to avoid the shortage of IPv4 address space.

As IPv4 resources are still in high demand, the IPv4 leasing market looks like the perfect fit for the IPv4 scarcity. IPv4 assets have become a new source of revenues in the current market, offering monetization opportunities for the IP owners. Here is our complete guide that can help you boost your revenue by leasing your unused IPs to different companies.

Companies that are in need of IPv4 address space can consider leasing IPv4 blocks. Leasing allows them to use the IPs without investing big amounts in purchasing these resources. The result is more flexibility for different projects that may come and go.