Evolution of IP Addressing: From IPv4 to IPv6

In our previous article, What is an IP Address?, we introduced the basic idea of IP addresses—like digital home addresses that help data find the right destination on the internet. This time, we’re going a step deeper.

As the internet grew from a handful of connected computers to billions of devices, the way we assign and manage IP addresses had to evolve. In this article, we’ll walk through the journey from IPv1 to IPv6, explain the limits of older versions, and show why IPv6 is so important for the future of the web.

Understanding Bits and Data Sizes in Computing

Before we dive deeper into how IP addressing evolved, it's important to understand one of the most fundamental building blocks of all digital communication: the bit.

A bit (short for binary digit) is the smallest unit of data in computing. A bit can hold one of two values:

• 0 (off)
• 1 (on)

Everything you see and do online—from loading a website to watching a video—is made up of these tiny bits. When bits are grouped together, they form larger units of data. Here's a breakdown of common data sizes in computing:

These units are used when storing or transferring data. However, in the world of networking—especially IP addressing—we usually focus on bits, since IP addresses are simply binary numbers used to identify devices.

Understanding Bits, Bytes, and Octets

Before we can understand how IP addresses are structured, let’s talk about bits, bytes, and octets—the building blocks of how computers handle data.

• A bit (short for binary digit) is the smallest unit of data in computing. It can only have one of two values: 0 or 1.
• A byte is made up of 8 bits.
• An octet is another word for a group of 8 bits, commonly used in networking to describe chunks of IP addresses.

So, when we talk about an IP address, we’re really talking about a series of bits grouped into octets.

How IPv4 Addresses Are Structured

IPv4 addresses are 32 bits long. These 32 bits are divided into four parts, each consisting of 8 bits. Each part is technically called an octet.

In every IPv4 address, there are four octets, separated by dots (.). When written in a format that's easy for humans to understand, an IP address looks like this: 192.168.0.1

Each of the numbers in that address—192, 168, 0, and 1—represents one octet.

But here’s the thing: while humans read these as regular numbers, computers don’t see IP addresses like this.

Instead, they work with binary, which is a system made up of only 0s and 1s.

So, the same address above looks like this to a computer:
11000000.10101000.00000000.00000001

From Binary to Human-Readable Numbers: How Computers Convert IP Addresses

To convert an 8-bit binary number (an octet) into a decimal number that humans can read, the computer uses a simple formula based on powers of 2.

Here’s how it works: Each bit in an octet represents a power of 2, starting from the right (2⁰) to the left (2⁷). Every position in the octet has a specific value, based on its place:

To figure out the decimal number that the computer will present to us, we add up the values in all positions where there’s a 1 in the binary. This is because the computer treats 1 as “on”—meaning that bit is active and should be included in the total. If the bit is 0, it's considered “off” and ignored.

Let’s take the first (left-most) octet as an example: 11000000
1 → 128
1 → 64
0 → 0
0 → 0
0 → 0
0 → 0
0 → 0
0 → 0
Total: 128 + 64 = 192

The other three octets are:

• 10101000 = 168
• 00000000 = 0
• 00000001 = 1

Put them together: 192.168.0.1

Now that we understand how computers actually see IP addresses and how we as humans read them, let’s continue and explore how IP versions evolved over time—and why we needed more.

The Birth of IP: From IPv1 to IPv4

Now that we understand how IP addresses are built and read, let’s explore how the Internet Protocol (IP) itself has evolved.

When the internet was in its earliest stages—still just a research experiment—engineers needed a way for computers to identify each other and send data back and forth. That’s where IP came in: a set of rules for assigning addresses and routing information between machines.

You’ve probably heard of IPv4 and IPv6, but the story didn’t start there. In fact, there were several earlier versions—some never officially released but still part of the evolution:

IPv1 – The Experimental Beginning

The very first version of IP was developed in the early 1970s by DARPA (the U.S. Defense Advanced Research Projects Agency) as part of ARPANET. This version was purely experimental and used internally to test early packet-switching concepts. It was never released publicly or documented as a formal standard.

IPv2 – A Stepping Stone

IPv2 was more of an internal iteration than a public release. It built on the early concepts of IPv1 and was part of the development process that shaped what would eventually become the first real version of IP used at scale. Like IPv1, it was never standardized or deployed on the public internet.

IPv3 – Experimental Again

As engineers continued experimenting, IPv3 introduced several improvements and changes to the header format of IP packets. However, it still wasn’t robust or scalable enough for real-world use. It remained in the testing phase and was eventually discarded in favor of a more complete and stable version.

IPv4 – The First Public Success

Finally, in 1981, IPv4 was introduced as the first official and widely adopted version of the Internet Protocol. This is the version that powers most of the internet today.

IPv4 uses 32-bit addresses, as we discussed earlier. Since each bit can be either on (1) or off (0), that creates 2 possibilities per bit. When you have 32 bits, the total number of combinations is 2³², which equals 4,294,967,296 unique IP addresses.

At the time, this seemed like more than enough. After all, the internet was mostly limited to universities, government agencies, and research institutions.

But no one anticipated the explosive growth of the internet in the decades to come.

How Many IP Addresses Does IPv4 Really Offer?

IPv4 uses 32-bit addresses, as we discussed earlier. Since each bit can be either 0 (off) or 1 (on), the total number of possible combinations is:

2³² = 4,294,967,296 unique IP addresses

That sounds like a lot—but in reality, we can’t use all of them.

Why Not All IPv4 Addresses Are Usable

To help organize and manage networks, some IPv4 addresses were reserved for specific uses. This includes private networks, loopback addresses, and special protocols. These reserved addresses can’t be routed on the public internet, meaning they’re not usable for identifying public devices.

Common Reserved IP Ranges

After excluding these ranges and other reserved blocks, the actual number of usable public IPv4 addresses is around 3.7 billion.

Other Factors That Accelerated IP Exhaustion

Even with nearly 3.7 billion usable public addresses, the internet has grown rapidly. Several factors made the problem worse:

• More people got online globally.
• Each household has multiple devices (phones, tablets, TVs, etc.).
• Businesses need large pools of IPs for their systems.
• Data centers and cloud services require millions of addresses.
• Some organizations were allocated large blocks of addresses early on and don't release them.

How NAT Helped Delay the Inevitable

One major workaround introduced was NAT (Network Address Translation).

With NAT, an organization or home only needs one public IP address, and all devices inside that network can use private IPs internally. The NAT device (typically a router or firewall) handles the conversion between private and public addresses:

• When a device sends data to the internet, the NAT device changes the source IP from a private address to the public one.
• When the response returns, it knows how to direct it back to the right internal device.

This translation reduced the demand for public IPs dramatically.

We provided a simple NAT example here, We’ll explore NAT in depth in a future article.

The Real Fix: IPv6 to the Rescue

While private IP ranges and NAT offered temporary relief, they were never meant to be a permanent solution. As billions of new devices came online—from smartphones to smart TVs to IoT gadgets—global demand for unique IP addresses continued to skyrocket. It became clear that a more scalable and future-proof solution was needed.

That’s where IPv6 comes in.

IPv6 was designed to solve the core limitation of IPv4: the address space. Instead of using 32-bit addresses, IPv6 uses 128-bit addresses. This change isn’t just an upgrade—it’s a leap of astronomical proportions.

From 32 Bits to 128 Bits: A Massive Expansion

While IPv4 offers a little over 4 billion unique addresses, IPv6 offers a staggering:

340,282,366,920,938,463,463,374,607,431,768,211,456

That’s 340 undecillion IP addresses!

This number is so massive that it can provide:

• Over 340 trillion IP addresses for every single person on Earth.
• Enough IPs to assign one to every atom in a grain of sand… and still have trillions left.
• A future where we never have to worry about “running out” of IPs again.

But IPv6 isn’t just about quantity—it also introduces efficiency, security, and simplicity.

The Global Transition: IPv6 Adoption and Challenges

Even though IPv6 was introduced back in 1998, the world hasn’t fully moved over. In fact, many systems today still run on IPv4—or use both IPv4 and IPv6 side-by-side (a setup known as dual stack).

So why hasn’t the world fully switched to IPv6?

There are a few key reasons:

• IPv4 still works. Most websites, apps, and networks are still accessible using IPv4. So there hasn’t been a forced need to upgrade.
• Cost and complexity. Switching to IPv6 means updating hardware, software, and internal systems. That can be expensive for companies and government networks.
• Compatibility. IPv6 is not backward compatible with IPv4. That means extra configuration is needed to support both systems during the transition.

Despite these challenges, IPv6 adoption is growing steadily—especially in countries like India, Germany, and the United States. Many mobile networks already prefer IPv6 because it's better suited for modern devices and streaming apps.

Big tech companies like Google, Facebook, YouTube and Netflix support IPv6 fully. Internet service providers are also upgrading their systems to make IPv6 more common in homes and businesses.

Final Thoughts: The Internet’s Address Book Is Growing Up

The internet keeps growing. More people, more devices, more connections—faster than IPv4 was ever built to handle.

That’s why IPv6 isn’t just an upgrade—it’s a necessity. It gives us room to grow, innovate, and connect billions more devices without hitting a wall.

And while the transition takes time, the direction is clear: IPv6 is the future. The internet is slowly but surely moving toward it—one website, one router, one network at a time.

Understanding how IP addressing works, and how we got here, helps us appreciate the invisible infrastructure that powers everything we do online—from checking email to streaming movies to chatting with friends around the world.

Key Takeaways

• IPv4 addresses are 32 bits long, providing about 4.3 billion possible combinations.
• Due to reserved ranges (like private IPs), the number of usable IPv4 addresses is much lower.
• To solve the shortage, workarounds like private IPs and NAT were introduced.
• Eventually, the internet outgrew IPv4, leading to the development of IPv6.
• IPv6 uses 128-bit addresses, allowing for 340 undecillion unique addresses (that’s 340 followed by 36 zeros!).
• IPv6 adoption is growing worldwide, though the full transition will take time due to cost, compatibility, and infrastructure.
• The world is moving toward IPv6 as the standard, ensuring the internet can continue expanding far into the future.