IP Lease for managing IPv4 scarcity

The deficit of the IPv4 addresses closely linked with technological limitation of the 32-bit code of the protocol IPv4, where is possible only 4,3 billion combination of the numbers. But is enough for the modern sector of information technologies, in which the quantity of the nodes in information technology is growing with the exponential rate. We will discuss if IP lease can be solution to fulfil needs of new customers.


The situation on IPv4 market and IP lease.

The companies that manage internet, announce that the addresses of the IPv4 protocol have come to an end. The cost for these sources is growing because of the deficit that has arisen.

According to our opinion, there are some alternative ways for the solving of 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.

growth in the number of LIRs
IPv4 waiting list


Volume of unused IP addresses and market demand

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.

The good illustration of the current situation, is for example, Germany, where in the presence of a shortage of IPv4 addresses of some firms and excess free addresses from others, there are practically no transactions between companies for their redistribution, the so-called transfer agreements.

IPv4 addresses hidden market Problems

Let`s go back to 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 of IPv4 was not so clear, and the address space was allocated to any organization, that asked for it, irrespective of her current needs.

Research institutes, state agencies and higher education institutes were the first to receive them.

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.

But a huge 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 actually withdrawn from the world’s address space. 

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 and therefore such a network for the outside world, as well as for everyone who monitors this network from the outside, is considered to be fully occupied, and is not included in world statistics reports.

According to documents and on paper, we have a shortage of IPv4 addresses, but in reality there is no shortage, there are only organizations that use their IPv4 resources inefficiently and economically. These resources could be useful today for the development of the digital economy of any country if they could be shared with other Internet users. IP lease may help to solve this issue.


Ways to solve the problem of IP-address deficit.

Lean use of IPv4 space, redistribution of resources on IPv4 market.

First, it is necessary to reach out to the “sleeping” network owners who do not use these networks and offer them IP lease.

It is necessary to use lean approaches, which have recently been gaining popularity in Germany.

Transfer of data from owners of ip addresses to market

How to be „green“ in the market of IP addresses and at the same time to make profit?

The idea of opening up the market of unused IPv4 addresses as a global project which companies can contribute to

  • But here`s what anyone who suddenly discovers their owner can do with their free networks, 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 leased out with IP lease.
  • For IP lease, special trading platforms, the so-called Market Place, can be effectively used.

INTERLIR Marketplace

One of the few platforms under the jurisdiction of the European Union is the German MarketPlace Interlir.com, which was developed by our company Interlir GmbH.

With the help of our platform, you can redistribute the entire mass of IPv4 resources unused in Europe for practical use, offering everyone who really needs IPv4 addresses to lease them from their owners for a while and as needed on a reimbursable basis.


The idea of frugality as an aid to the IT market for further development.

  • 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 huge funds for equipment replacement, this can bring real benefits to those institutions – owners of IP resources that will participate in this.
  • The release of new address space will have a beneficial effect on the development of the IT market in the country and will allow developing and already established companies not to spend significant funds on the purchase of expensive equipment or on the purchase of IP address networks on the open market.
  • The other way is to conduct a global audit program on the use of 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.

The benefits of using the idea of frugality for the governmentand business. Using the Interlir platform in the idea of IPv4 Lean.

  • The vacated address space can also be distributed through the European platform Interlir.com 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, as well as 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 the purpose of 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 IPv4 address space in Europe.

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.

Interlir Marketplace for an IP address space

The deficit of the IPv4 addresses 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 the IPv4 protocol. The companies that manage the Internet announce that the addresses of the IPv4 protocol have come to an end. The cost 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 IPv4 addresses 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 of IPv4 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 of IP addresses 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 their IPv4 resources. 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 Interlir.com, which was developed by our company Interlir GmbH. With the help of our platform, you can redistribute the entire mass of IPv4 resources unused in Europe for practical use, offering everyone who needs IPv4 addresses 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 Interlir.com 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 IPv4 address space in Europe.

Considering 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 IPv4 address space in Europe.

What is IPv4 address?

Short introduction to internet protocol addresses IPv4 address, or Internet Protocol address, is a unique identifier that points to each device on the internet and allows them to communicate with each other in order to send and receive data. Without IP addresses, the internet would not be able to work as it does today, and most of our electronic devices would not be able to access any data online without them. That’s why understanding IP addresses, how they work, and how they are created can help you better understand the internet as a whole, especially if you’re looking to get more involved with computer networks and web programming in general.


Let’s explain IP addresses in plain English. IP stands for Internet Protocol, which means it’s a set of rules used to identify your computer on a network. There are two main kinds of IP addresses: IPv4 and IPv6. They each have their pros and cons depending on what you’re looking for.

The good news is that most ISPs offer both versions now, so you can pick whatever one works best for your business needs. Both types of IP addresses are hierarchical; they’re broken up into four or six parts octets.

Each section represents a different part of an IP address and its relevant information. It also plays a significant role in why organizations use routing protocols to manage IP address allocation. As long as everyone uses them correctly, they work like a charm. Of course, not everyone wants to do that—or has room for that many addresses in their system yet (they’re expensive!).

So how does data get through these IP nets then? At least some internetworking protocol exists between them to make sure data gets passed along successfully. The actual process depends on how well connected everything is! This is where subnetting comes into play;


What is subnet ?

subnetwork or subnet is a logical subdivision of an IP network. The practice of dividing a network into two or more networks is called subnetting.

For IPv4, a network may also be characterized by its subnet mask, the bitmask that yields the routing prefix when applied by a bitwise AND operation to any IP address in the network.

For example, the prefix 190.21.100.0/24 would have the subnet mask 255.255.255.0. Subnet masks are expressed in dot-decimal notation.

For example, 190.21.100.0/21 is the Internet Protocol version 4 network prefix starting at the given address, having 21 bits allocated for the network prefix and the remaining 11 bits reserved for host addressing.

Traffic is exchanged between subnetworks through routers when the routing prefixes of the source address and the destination address differ.

Subnetting may also enhance routing efficiency or have advantages in network management when different entities in a larger organization administratively control subnetworks.

Subnets may be organized logically in a hierarchical architecture, partitioning an organization’s network address space into a routing structure.


IPV4 vs. IPV6 Explained

IPV4 (IP version 4) is what we currently use to connect to websites and servers, but it has a number of problems. For one, IPV4 addresses are running out. An IP address is simply an assigned number used by your computer or mobile device to access content on a network. We need new addresses because we’re nearly out of them. However, IPV6 (IP version 6) solves that problem as it can provide 2128 possible unique addresses for every human being on Earth.


What’s the difference between an IPv4 IP and an IPv6 IP?

IP stands for Internet Protocol, and in general it refers to a device’s specific location on a network. But that term can be confusing because there are two types of IPs—IPv4, which was created in 1981; and IPv6, which was only fully implemented recently. If you’ve got a device connected to your home router or office computer system, chances are you’re using an IPv4 IP address.

That being said, both versions actually fall under one category—in other words, they’re both IP addresses. The main difference between them is their size (IPv4 is 32 bits long and IPv6 is 128 bits long), but that doesn’t have much practical use for consumers yet; typically IP addresses will just look like strings of numbers separated by dots. Since most computers now support both protocols, it might not matter which type you use when browsing online.


What is the IPv4 address structure

IPv4 notation

(source: Wikipedia)

What is IPv4 address in a computer network? All IP addresses are a series of four numbers, from 0 to 255. Each is separated by dots (periods). Each number can be any number between 0 and 255. For example, if the address is 212.168.0.0, then the first number would be 212, the second 168, the third 0 and the fourth 255.


What is the IPv6 address structure

IPv4 and ipv6 notation

(source: IEDN)

The Internet Protocol version 6 (IPv6) is the latest Internet Protocol version. IPv6 is a network layer protocol for packet-switched internetworking and provides end-to-end datagram transmission across multiple IP networks.

It was designed to replace the current protocol, IPv4, which is reaching its maximum capacity. The IPv6 address structure is hierarchical and consists of 128 bits—compared with 32 bits in IPv4. Each bit in an address represents a number from 0 to 256; if a bit is set to 1, it’s part of the address.

The protocol implementation has been separated into two layers: addressing and routing. Addressing determines where packets should be sent next; routing decides how to get there.

IPv6 addresses are eight groups of four hexadecimal digits each, separated by colons. Since each digit can represent up to 16 numbers, each group contains four or eight digits altogether. Every device connected to an IP network must have one or more globally unique IPv6 addresses associated with it.


Why we run out of IPv4

IPv4’s unique addressing scheme requires that each device connected to a network be given its individual IP address. Unfortunately, IPv4 can only support 4.3 billion devices on a single network;

IPv4 can run out at any time, and Internet Service Providers (ISPs) are already running out of IPv4 addresses to give out for new customers. The world has no choice but to replace IPv4 with an alternative addressing scheme like IPv6.


Who needs IPv4 and IPv6 addresses

But behind that number exists an entire network of computers, which can be vulnerable to attack. Get an IP address wrong, and your data could be sent to another server or even cause damage to someone else’s system. Do yourself (and others) a favor by getting your IP address right.

Even if you don’t own your IP address, you can still have one assigned to you from companies that specialize in selling them. Just as businesses go out of their way to ensure people find their physical location on a map, they also want their IP address communicated clearly.

Companies purchase large blocks of IP addresses to distribute them among branches and other sites, so they’re easy for customers and prospective partners alike to find them online. By giving each site its unique IP number, businesses ensure their headquarters has a recognizable IP address ready when visitors look up its information online.


There a lot of different companies which need a lot of IPv4 and IPv6 addresses :

  • Internet service providers
  • Hosting Companies
  • Cloud Services
  • VPN services
  • Various Internet Businesses
  • Banking and payment services


LIR and RIR

Most IP addresses are owned by LIRs (Local Internet Registry). An LIR will get IP space from RIR (Regional Internet Registry), often in blocks that are administered for private use within a geographical region. Each region keeps track of how much IP space it has available, how many accounts it has registered to assign with those spaces, and who should get what block next. ARIN is responsible for administering IP addressing space within North America, while RIPE NCC does so within Europe and Africa.

There five RIRs and each covers specific geographical regions :

  • ARIN
  • RIPE NCC
  • APNIC
  • LACNIC
  • AFRINIC

(source: IEDN)


What does Interlir with IPv4 network addresses?

Interlir.com provides a marketplace for companies to monetize their unused IPv4 address and help companies to rent IPv4 addresses for a fair price.

Register now at https://portal.interlir.com and start business with us.


Paul Goloborodko

Interlir Product director, VP

pgoloborodko@interlir.com


Digital future and IPv4

The IP addressing asset, unknown to anyone a few years ago, arose from a purely technical collision. IP addresses are trite. The allocation from the Primary IPv4 Registry, begun by John Postel in the 1970s, suddenly came to its logical end, and the new IPv6 has not yet gained its popularity.

In fact, the IP address is not a subject of ownership, there is a right reserved for the market participant to make changes to the registry entries. And the registrar is the regional registry (RIR). This right, in fact, can be transferred between local registries (LIRs).

Despite the lack of a clear legal framework, a chaotic market for the resale and rental of these very rights has arisen. Of course, as always, the emerging market lacks any regulation and rules, other than those dictated by the technical features of the transfer of rights from one user to another.

The avalanche-like increase in the cost of IP address management rights has generated a huge number of different sites, sites, and telegram channels, which, without any user identification and a well-developed contractual base, carry out transactions worth tens of thousands and millions of euros. The legal and tax consequences of these transactions are still difficult to predict, but they will come sooner or later, which, as usually happens, will be a complete surprise for market participants.

We created the InterLIR platform to systematize the processes described above. Most importantly, we have created a full-fledged legal and tax base for transactions, protecting the rights of all parties.

The main problem that we see is that, in fact, an IP address has all the properties of a digital asset, but at the same time it is in a legal and tax vacuum.

We want to start the transformation of an IP address into a full-fledged object of law, which will lead, among other things, to its protection as an asset for investing money and, probably, to its use in the future for mutual settlements.

The properties of an IP address allow it to be fully used in this capacity: worldwide distribution and almost complete ubiquitous penetration, objective value, since it is part of the service provided, and subjective value, which is expressed in the properties of an IP address similar to digital currencies.

These properties are inherent not only in IPv4 addresses but also in the addresses of the new IPv6 protocol.

The task of our InterLIR platform is to turn these resources into a full-fledged digital asset, we plan to do this together with other market participants and technical regulators.

Become a user of our platform later this year and contribute to a new digital future.

European IPv4 addresses marketplace

Why we have made InterLIR in Germany.

In 2011, RIPE announced the depletion of IPv4 addresses. IPv4 addresses continue to be a scarce commodity today. Prices for this resource are constantly growing. Over the past 3-4 years, many IP brokers have emerged to help transfer the rights to manage IP addresses from one user to another on a permanent or temporary basis. However, the prices for the services of these brokers, their legal framework, and the quality of these services vary greatly. A chaotic rental and sale market has emerged around IP addresses.

The main motivation behind the creation of the InterLIR IPv4 marketplace platform connecting the owner of IP addresses and with the consumer is the desire to organize an orderly, civilized and predictable market for rights to IP resources. We see that it is necessary and possible to stop the rise in prices for these resources.

Today, the legal regulation in Europe in this area is almost completely absent. Therefore, to ensure the protection of the transaction to the platform’s clients, Germany’s legal framework was taken as a basis, where the observance of the rights of the parties to the transaction is at the highest level.

It is also important to note that today there are about 40 million IP addresses in Germany, which are managed but not used by corporations, research institutes, and higher education institutions. The redistribution of unused IP addresses through the InterLIR IPv4 marketplace platform will help solve the problem of a shortage of IPv4 IP addresses among IT companies in Germany and stop the rise in prices for IT services, in the cost of which the price of an IP address is already of great importance.

We expect to bring a large number of frozen IP addressing resources into circulation and help their owners transfer them for temporary use on a reimbursable basis through our platform. The income from such use of IP resources can be significant for their owner.

IP address abuse management

Prevention of fraud and blacklisting of a network space is crucial for an internet sustainabilityHolders of the rights to manage blocks of IP addresses are constantly faced with a dilemma. If they have unused IP addresses, then they do not bring them any income despite the growing market, and the use of addresses through a paid temporary transfer of rights to third-party companies can create a lot of problems for their owner.

Such problems include the inclusion of IP addresses in spam lists or their use for illegal activities, for example, for a hacker attack on computer infrastructure. These can be sites with illegal content hosted on these addresses and much more that can compromise both the IP address itself and its owner.

It is for this IP address abuse management that we have created the InterLIR platform, which allows you to protect the owner of such a valuable asset as an IP address from possible financial and reputational damage.

To begin with, we conduct a full survey of our counterparties, study the history of their use of IP addressing from other owners, analyze the beneficiaries and the company itself as you may see it’s a full IP address abuse management. At the next stage, after the transfer of IP networks to lease, we constantly monitor complaints from Internet users that come through official channels, and in the end, we carry out, by our own means, preventive selective monitoring of networks in use by tenants for prohibited activities.

Thus, working with our platform with IP address abuse management is objectively safe. The client can offer his networks for rent on the InterLIR platform without fear for their future and legal problems.