The great IP address space redistribution

One of the possible ways to support the development of the IT sector is the effective use of existing IPv4 address space. Due to the rapid growth of information technology and many objects associated with the Internet, IP addresses of the old but reliably working protocol IPv4 have become scarce. And the introduction of a new protocol, IPv6, is associated with many technical and organizational difficulties and is still delayed for many years. The Interlir Marketplace is a place where you can buy IPv4 space on favorable terms and use it to improve your business.

Interlir Marketplace for an IP address space

The deficit is closely linked with the technological limitation of the 32-bit code of the protocol IPv4, where it is possible for only 4,3 billion combinations of the numbers. But it is enough for the modern sector of information technologies, in which the quantity of the nodes in information technology is growing exponentially. There are a few numbers of the several ways to solve the deficit problem. For example, all IT market participants can use the IPv6 protocol, and it is possible to use also NAT (Network Address Translation) technology or other ways. 

But in the IPv6 protocol, for example, international security issues have not always been adequately resolved, and besides, the standard requires large expenditures for the purchase of new equipment. NAT cannot be used in all renewable sources. At the same time, there are always disadvantages associated with the timing of implementation or the cost of equipment.

In our opinion, there are some alternative ways to the solving the deficit issues that could help to extend the lifetime of the protocol IPv4 and related equipment, and also without considerable investment in the purchase of new equipment and the disposal of the old, to make a gradual transition to the address space of the IPv6. The meaning of these ways is in thrifting the available address space of the IPv4 protocol.

It seems to everyone that there is a global deficit in the accessible address space of this protocol. The companies that manage the Internet announce that they have come to an end. The cost to buy IPv4 space for these sources is growing because of the deficit. 

In fact, there is no shortage whatsoever!

The reality is that more than 30% of the existing IPv4 address space is in a frozen, unused state, and an equal number of addresses are in a pseudo-used state. It applies to the whole address space IPv4 used in Europe. 

A good illustration of the current situation in Germany, wherein the presence of a shortage of some firms and excess free addresses from others, there are practically no transactions between companies for their redistribution, the so-called transfer agreement.

Let’s explore this in more detail.

Let’s go back 30 years ago to the era when the address space of the Internet began to be shared among participants in the exchange of information. 

In that period, the shortage was not evident, and the address space was allocated to any organization that asked for it, irrespective of her current needs.

Where a /24 network (256 addresses) would be more than enough, a /16 network (65512 addresses) was allocated. No one counted the allocated sources, as there seemed to be enough for everyone and for a long time. Research institutes, state agencies, and higher education institutes were the first to receive them. Then IP addresses are allocated among the big corporations and firms. The blocks allocated at that time could not be fully used since the then participants on the Internet did not have such a number of nodes in their networks. Thus, unused addresses were safely forgotten.

Later, with the commercialization of the Internet, the distribution of IP addresses began to be carried out among Internet service providers, where the degree of utilization was already much higher. But a vast number of blocks were once given to those who never planned to use them.

As a result, up to 30% of the world’s IP addresses at the disposal of various LIRs (Local Internet Registry), which is almost 1.3–1.4 billion, are now in a frozen state and are withdrawn from the world’s address space. According to the latest report by RIPE NCC, only in Germany, about 40 million IP addresses are not explicitly used. They are managed by LIRs, which do not perform their function of allocating them. 

Most of these unallocated resources are in LEGACY or PI status.

No less of a problem with the remaining 70 percent of the address space. It is not a secret for anyone related to IT that chaos reigned in the distribution of address space at the stage of development of corporations and providers.

A simple example is that an enterprise has a /16 network consisting of 256 /24 networks, each consisting of 256 IP addresses.

Once upon a time, the trend was that the system administrator allocated a /24 network for each new project without really thinking about how many nodes in the local infrastructure it should serve. As a result, the division used 5–10 IP addresses, but since the route was set to the entire network, the whole/24 network was displayed by the system administrator as fully occupied.

The feature of accounting for network recycling in the regional RIR (Regional Internet Registry) registry does not allow you to look into the distribution lower than /24. Therefore, such a network for the outside world and everyone who monitors this network from the outside is considered to be fully occupied and is not included in world statistics reports. There are many examples of such careless use of IP resources.

One large German corporation, whose name we will not name, started a new project requiring a /24 network. It suddenly became clear that despite the corporation having at least 500 such networks, none could be allocated for the project. Because they are all busy, it turned out that the company’s admins always given at least a whole /24 network (256 addresses) for each new project or created service, even though only 5-10 IP addresses could actually be used in it. Moreover, these addresses were issued chaotically and could be random, not optimally, scattered throughout the dedicated network. As a result, the project could not obtain the necessary networks for its work.

It turns out that with all the networks occupied “on paper,” a large enterprise can use only 15–20% of the entire address space it has. The other addresses are not used. And it is complicated to correct this situation since network optimization by moving network nodes scattered throughout the IT landscape into one network is a global problem that is difficult to solve for any corporate system.

According to the documents and on paper, we have a shortage of IPv4 addresses, but in reality, there is no shortage; there are only organizations that inefficiently and not frugally use. These resources could be helpful today for the development of the digital economy of any country if they could be shared with other Internet users.

What are the possible ways to solve this problem?

First, it is essential to reach out to the “sleeping” network owners who do not use them. Our analysis of the state of existing IP resources shows that many owners of IP resources do not see them, maybe because these resources were apparently forgotten over time. It is necessary to use lean approaches, which have recently gained popularity in Germany.

How to find unused IP networks in your enterprise is a topic for another large article. The fact is that today, IP addresses can be easily turned into money. They can be sold, and they can be rented out. But here’s what anyone who suddenly discovers their owner can do with their free networks, which we will briefly describe.

For example, an IP network with a size of /16 (65512 addresses) can bring its owner about 30,000 € per month when rented out. And many owners of such networks do not imagine that they are sitting on enormous wealth.

Special trading platforms, the so-called Market Place, can be effectively used for renting. Such platforms exist in the United States of America, England, in China. The only trading platform under the jurisdiction of the European Union is the German MarketPlace, which was developed by our company Interlir GmbH. With the help of our platform, you can redistribute the entire mass of resources unused in Europe for practical use, offering everyone who needs to rent them from their owners for a while and as required on a reimbursable basis.

In our opinion, it is possible to involve the state itself in the process of thrifty distribution of IP resources, which could, among other things, legally confirm the legitimacy of such an approach and encourage owners who have excess resources to participate in the redistribution. In addition to real practical benefits for the IT industry and accelerating its development, as well as saving enormous funds for equipment replacement, this can bring tangible benefits to those institutions – owners of IP resources that will participate in this.

For example, there are already universities in the USA that finance their current activities by renting out excess address space.

The release of new address space will have a beneficial effect on the development of the IT market in the country. It will allow developing and already established companies not to spend significant funds on purchasing expensive equipment or the purchase of IP address networks on the open market.

The other way is to conduct a global audit program on address space in universities, government agencies, and corporations and develop a detailed plan that would allow moving and consolidating IP resources and freeing up the available address space for each specific enterprise. Only a few firms in the world have unique experience in such an audit.

Interestingly, a relatively large number of IP addresses are managed by government agencies. That is why the state can play a decisive role in this process. The vacated address space can also be distributed through the European platform among all participants in the IP resource market. In this case, consumers will be relieved of the need to purchase address space from spontaneous IP brokers and third-party and foreign enterprises at incomprehensible and, at times, non-market prices.

The obvious benefit of using the address space redistribution system makes our platform applicable, including at the state level, for market regulation of the price of such resources.

Given that our system, using unique technologies, provides free access to IP resources to any market participant, we can confidently count on the use of our developments to create a nationwide system for market regulation of the address space in Europe. Sell and buy IPv4 easy and fast with Interlir.