Computers not connected to the Internet, such as factory machines that communicate only with each other via TCP/IP, need not have globally unique IP addresses.
Three ranges of IPv4 addresses for private networks were reserved in RFC 1918.
Early network design, when global end-to-end connectivity was envisioned for communications with all Internet hosts, intended that IP addresses be uniquely assigned to a particular computer or device.
However, it was found that this was not always necessary as private networks developed and public address space needed to be conserved.
Its role has been characterized as follows: "A name indicates what we seek. A route indicates how to get there." and this system, known as Internet Protocol Version 4 (IPv4), is still in use today.
Ip Address Assignment Methods
However, due to the enormous growth of the Internet and the predicted depletion of available addresses, a new addressing system (IPv6), using 128 bits for the address, was developed in 1995, and is being deployed worldwide since the mid-2000s.
Explanation of the IPv6 address assignment using Ethernet. Explanation of the IPv6 address assignment using Ethernet.
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The following table gives an overview of this now obsolete system.
Classful network design served its purpose in the startup stage of the Internet, but it lacked scalability in the face of the rapid expansion of the network in the 1990s.