When the Internet came into fruition, IPv4 addresses were just what we needed to go online and exchange information. Nowadays, however, things have gotten a bit more complicated. As our online world expands, so does our need for more addresses.
Those 4 billion IPv4 addresses have become a modern commodity, and many businesses and companies either want to buy or sell them. This has led to IPv4 addresses becoming more and more expensive. So, the market had to adapt, and for that, companies can opt for various methods of getting IPv4 addresses.
One of these methods is the IPv4 auction, and today we are going to discuss what it is and what its benefits are. Moreover, we will talk about the process involved in IPv4 auctioning and what has led to such methods of acquiring IPv4 addresses.
IPv4 vs IPv6, in retrospect
IPv4 was born in the early 1980s, in a 32-bit format. This means a total of 4,294,967,296 unique and available addresses. Back then, 4 billion IPv4s were more than enough to help us connect to the Internet.
Well, we were wrong, as the World Wide Web has run the IPv4 space almost dry. IPv6 was designed as a replacement for IPv4 that would not only offer more unique addresses (its 128-bit format is hugely flexible), but also technical upgrades.
But the IPv4 is still the undisputed king of networking? How’s that? Well, even though IPv6 is super versatile, its adoption is somewhat slow.
On top of that, IPv4 still manages to satisfy the needs of users. Clever methods such as NAT (Network Address Translation – turning multiple private IPs into fewer public IPs) and subnetting do a great job of that.
However, the IPv4 scarcity has not left the market untouched. Prices have surged in the last few years, so an IPv4 address you could once buy for 5 to 10$ is now sold for as much as 60$. This simply states the obvious: IPv4 is limited and has become a commodity.
What are the main factors that influence the IPv4 selling price?
IPv4 price grows year by year. That was a warning sign many big companies took seriously. To get a better idea of how precious IPv4 has become, you should know that Microsoft paid 7,5 million USD to secure 666,624 IPv4 addresses in 2011.
Eight years later, Google purchased the entire /12 block, consisting of 1,048,576 IP addresses. Even Amazon followed along, purchasing during 2017-2019 no less than 28 million addresses.
That’s because some companies actually own large blocks of IPv4 addresses without even using them. This is a huge revenue potential, should they wish to trade them. This situation shows that, even though we (in theory) ran out of addresses, around 20% of global IPv4 resources remain unused.
But what dictates the price of IPv4 addresses? In essence, there are two main factors for that: the supply and demand imbalance, and the slow adoption rate of IPv6.
In April 2022, there were 5 billion Internet users worldwide. This has exceeded the total number of IPv4 addresses, a number which, at the time of IPv4’s birth, would have been more than enough.
IPv6 was born in 1996, designed to be an excellent alternative. However, despite its versatility and abundance, the adoption rates of IPv6 have been slower than expected.
Even though mobile network operators are leading in IPv6 adoption at 80 to 100%, things are not going that smoothly universally. Studies on IPv6 connectivity among Google users show that globally, IPv6 adoption barely crossed the 40% mark in June 2022. In addition, the global infrastructure is not entirely upgraded to offer support for IPv6 yet.
This need to keep the IPv4 afloat paved the way for IP trading. Companies looking to acquire IPv4 blocks can do so through different methods. Popular examples include getting them via ‘’Buy Now’’ platforms that sell IP addresses, like V4Escrow, or winning them at IP auctions.
What is an IPv4 auction?
In the simplest terms, it is a process by which organizations can buy blocks of IPv4 addresses. Companies often take part in IPv4 auctions to get a larger allocation of addresses or to receive a more specific range of addresses.
Winning an IPv4 auction is a big deal. First, you get to own a valuable asset whose global availability is quite limited. Second, it gives you access to additional benefits.
Why should you care about winning an IPv4 auction?
Companies have various reasons they need IP addresses. Obviously, winning an IPv4 auction will give you the upper hand not only in meeting your business needs but also in other aspects.
For example, it can help you save money. This is because IPv4 addresses are becoming more and more valuable as time goes on. So, by winning an auction and getting IPv4 blocks now, you can avoid having to pay more for them in the future.
Or you can do it the other way around. Get the IPv4 addresses now, keep them until they get more expensive, and then sell them. Either way, the moment you win an IPv4 auction you get to own a valuable piece of Internet real estate.
The steps involved in the process of IPv4 auctioning
IPv4 auction is usually facilitated with the help of RIRs (Regional Internet Registries). For example, ARIN has a service that helps with IPv4 address trades.
But before you jump into the game, you need to make a few preparations.
- This means you must make sure you meet the requirements for buying IP addresses. Strict conditions govern the trade of IP addresses, and you need to meet them before registering to the auctioning platform you want. There are three main conditions you must meet:
– Get approved by registries;
– State why you need IP addresses;
– Use a reputable partner that can help you get registered.
- Then, you can pay the required deposit and study the auction rules.
- You can place your bids on the desired IP address and adjust them as the auction progresses.
- When you have agreed on the costs of the address, the payment process can begin.
- After you’ve finished the transaction, it’s time for the transfer and update processes. The IP address or addresses you won will be transferred to a new database and the information will be updated accordingly.
Is there a better and faster alternative to getting IPs?
Yes, it is. Companies that do not wish to invest a lot of money in owning IPs permanently can opt for IP leasing. This is a more flexible and cost-efficient way of ensuring your business has the IP range it needs.
The overall demand for IPv4 at reasonable prices has made more companies consider leasing addresses via IP marketplaces or through IP brokers.
Such services ensure you can get the IP range you need cheaper than buying the blocks. Through leasing, you can use the addresses for how long you need, without additional commitments.
This in turn helps you save money. That is because you can invest more into other assets without worrying about paying a lot for IP addresses. And in doing so, you also help develop a healthier IPv4 ecosystem. Companies looking for IPs can lease them from companies looking to monetize their unused assets.
For this, a dedicated marketplace like IPWAY is the most suitable alternative. Dedicated marketplaces provide transparency, meaning they work only with reputable and trustworthy clients. In short, this decreases the risk of getting IPs with bad reputations or a suspicious history that damages your business.
Winning an IPv4 auction is a big deal. As these addresses are becoming more and more expensive, it’s important to make sure you know when to act and get the blocks your company needs.
While auctioning for IPs is beneficial, there are straightforward and cost-efficient alternatives you can turn to as well. IP leasing can provide you with the ranges you need at reasonable prices. On top of that, many IP brokers and marketplaces are happy to provide you with customized IPs and ease the trading between lessors and lessees.