Every machine on the Internet has a unique identifying number, called an IP Address. A typical IP address looks like this:

• 216.27.61.137

To make it easier for us humans to remember, IP addresses are normally expressed in decimal format as a "dotted decimal number" like the one above. But computers communicate in binary form. Look at the same IP address in binary:

• 11011000.00011011.00111101.10001001

The four numbers in an IP address are called octets, because they each have eight positions when viewed in binary form. If you add all the positions together, you get 32, which is why IP addresses are considered 32-bit numbers. Since each of the eight positions can have two different states (1 or 0) the total number of possible combinations per octet is 2⁸ or 256. So each octet can contain any value between 0 and 255. Combine the four octets and you get 2³² or a possible 4,294,967,296 unique values!

Out of the almost 4.3 billion possible combinations, certain values are restricted from use as typical IP addresses. For example, the IP address 0.0.0.0 is reserved for the default network and the address 255.255.255.255 is used for broadcasts.

The octets serve a purpose other than simply separating the numbers. They are used to create classes of IP addresses that can be assigned to a particular business, government or other entity based on size and need. The octets are split into two sections: Net and Host. The Net section always contains the first octet. It is used to identify the network that a computer belongs to. Host (sometimes referred to as Node) identifies the actual computer on the network. The Host section always contains the last octet. There are five IP classes plus certain special addresses:

• Default Network - The IP address of 0.0.0.0 is used for the default network.
• Class A - This class is for very large networks, such as a major international company might have. IP addresses with a first octet from 1 to 126 are part of this class. The other three octets are used to identify each host. This means that there are 126 Class A networks each with 16,777,214 (2²⁴ -2) possible hosts for a total of 2,147,483,648 (2³¹) unique IP addresses. Class A networks account for half of the total available IP addresses. In Class A networks, the high order bit value (the very first binary number) in the first octet is always 0.

• Loopback - The IP address 127.0.0.1 is used as the loopback address. This means that it is used by the host computer to send a message back to itself. It is commonly used for troubleshooting and network testing.
• Class B - Class B is used for medium-sized networks. A good example is a large college campus. IP addresses with a first octet from 128 to 191 are part of this class. Class B addresses also include the second octet as part of the Net identifier. The other two octets are used to identify each host. This means that there are 16,384 (2¹⁴) Class B networks each with 65,534 (2¹⁶ -2) possible hosts for a total of 1,073,741,824 (2³⁰) unique IP addresses. Class B networks make up a quarter of the total available IP addresses. Class B networks have a first bit value of 1 and a second bit value of 0 in the first octet.

• Class C - Class C addresses are commonly used for small to mid-size businesses. IP addresses with a first octet from 192 to 223 are part of this class. Class C addresses also include the second and third octets as part of the Net identifier. The last octet is used to identify each host. This means that there are 2,097,152 (2²¹) Class C networks each with 254 (2⁸ -2) possible hosts for a total of 536,870,912 (2²⁹) unique IP addresses. Class C networks make up an eighth of the total available IP addresses. Class C networks have a first bit value of 1, second bit value of 1 and a third bit value of 0 in the first octet.

• Class D - Used for multicasts, Class D is slightly different from the first three classes. It has a first bit value of 1, second bit value of 1, third bit value of 1 and fourth bit value of 0. The other 28 bits are used to identify the group of computers the multicast message is intended for. Class D accounts for 1/16^th (268,435,456 or 2²⁸) of the available IP addresses.

• Class E - Class E is used for experimental purposes only. Like Class D, it is different from the first three classes. It has a first bit value of 1, second bit value of 1, third bit value of 1 and fourth bit value of 1. The other 28 bits are used to identify the group of computers the multicast message is intended for. Class E accounts for 1/16^th (268,435,456 or 2²⁸) of the available IP addresses.

• Broadcast - Messages that are intended for all computers on a network are sent as broadcasts. These messages always use the IP address 255.255.255.255.