Are we short of Internet address space?

The background

As you probably know, the IP addresses are represented by 32 bits. This means that the number of the different IP addresses is 2 powered by 32, which is 4 294 967 296 (100000000 in hexadecimal, with 1 more than FFFFFFFF in hexadecimal), i.e. about 4.3 billion addresses. Some of the addresses are for private networks, others are assigned to different functions and therefore are unavailable for general use. The organization which assigns the IP addresses is IANA, the Internet Assigned Numbers Authority.

What happened?

Recently, IANA announced that on January 31^st 2011 it had handed out the last available IP range. On April 15^th 2011 the regional Internet registry for Asia and Pacific APNIC announced its address space had depleted. The other regions of the world are expected to exhaust their IP addresses up to several years.

According to some sources the distribution of IP addresses is far from optimized.

If left to the pure market drive, the IP addresses supply and demand on the aftermarket can optimize the IP address distribution for another 10 or 20 years. For example, Microsoft acquired a 666624 addresses network which belonged to Nortel for $7.5 million, which makes $11.25 per IP address.

Some history

It is not for the first time IP address space is said to be depleted. In the early 1990s the IP address space distribution was optimized as classless internet-domain routing was introduced. This solution is still working well nowadays.

What next?

All the facts written above are valid for IPv4, the commonly used version of the Internet protocol. There are 2 powered by 128 IPv6 possible addresses, which is 340282366920938463463374607431768211456 in decimal, or 100000000000000000000000000000000 in hexadeximal. Some of them are allocated for private networks, some are allocated to special uses, however some people argue that those addresses are more than the atoms in the universe. IANA has more than enough IPv6 addresses to distribute.

So why aren't we already running pure IPv6 networks?

There is a huge issue with the legacy hardware. While practically all modern operating systems like like Linux and Windows are ready with an IPv6 implementation, most network carrier equipment vendors also supply IPv6-ready equipment, the home networking equipment vendors are still supplying mostly IPv4 home networking equipment, which is not compatible with IPv6. The situation is pretty much the same as the situation with DVB-T where the suppliers are still producing MPEG-2 compatible TV sets, and the retailers are retailing them as DVB-T ready, while the most of new DVB-T networks employ MPEG-4 H.264 AVC or DVB-T2. It will be too late when the consumers who thought they invested in the future realize they have bought a peace of scrap which cannot be used for what it is bought for after the no-questions-return period, which is usually 7 days, expires.

I think there will be an intermediate period when the real IPv4 addresses will be reused by the ISP (Internet Service Providers), with network addresses between them and the end users from the private networking ranges of IPv4. The ISPs will either use network masquerading and real IPv4 addresses will be shared between end users, thus limiting the ability of the end users to run their own services, or when the ISPs at the end connect to IPv6 carriers, the private IPv4 addresses will be mapped to IPv6 addresses for the end users who don't support IPv6, and IPv6 addresses will be used for the end users who support IPv6. The one-to-one mapping will probably be mandated by anti-terrorism and in greater extent the anti-piracy laws which will require the IP address of a user to be visible end-to-end.

There will be a considerable penalty for using IPv6, as the address part of the IPv6 packets will exceed in many cases the payload data. The good thing about IP addresses however is that when there are huge amounts of data, the address parts will be compressible, as the addresses will not change during the sessions. For the instant messaging protocols which rely on UDP the IPv6 address penalty will exist.

An issue will be with the fact that 128 bits are not human-readable and not as memorable as the IPv4 addresses. Many network administrators are still not prepared for the security challenges of IPv6 and are still not willing to read 128-bit IPv6 addresses.

Another possible development is that some countries known with their Internet censorship will employ the situation with the IPv4 depletion as an excuse to get separated from the rest of the Internet, using the whole IPv4 networking address space, thus reducing the ability of their citizens to connect to the rest of the world. There will be a huge aftermarket of used IPv4 equipment which comes from the richer countries which have converted their networks to IPv6 to poorer countries which still run IPv4.

On the Internet naming side there are a lot of internet names like ipv6carrier.com, which have been registered with the hope to be sold when the IPv4-to-IPv6 transition comes to

The conclusion

IPv6 has been around for a while. There will be an intermediate period, but the transition is inevitable. The question is not if but when.

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