IP Address Size, Address Space and "Dotted Decimal" Notation
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IP Address Space
Since the IP address is 32 bits wide, this provides us with a theoretical address space of 232, or 4,294,967,296 addresses. This seems like quite a lot of addresses! And in some ways it is. However, as we will see, due to how IP addresses are structured and allocated, not every one of those addresses can actually be used. One of the unfortunate legacies of the fact that IP was originally created on a rather small internetwork is that decisions were made that wasted much of the address space. For example, all IP addresses starting with 127 in the first octet are reserved for the loopback function. Just this one decision makes 1/256th of the total number of addresses, or 16,277,216 addresses, no longer available. There are also other ways that the IP address space was not conserved, which caused difficulty as the Internet grew in size. We'll see more about this in the section on classful addressing.
This IP address space dictates the limit on the number of addressable interfaces in each IP internetwork. So, if you have a private network you can in theory have 4 billion plus addresses. However, in a public network such as the Internet, all devices must share the available address space. Techniques such as CIDR (supernetting) and Network Address Translation (NAT) were designed in part to more efficiently utilize the existing Internet IP address space. Of course, IP version 6 expands the IP address size from 32 bits all the way up to 128, which increases the address space to a ridiculously large number and makes the entire matter of address space size moot.
(Incidentally, the second binary number is the larger one.)
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