What is the IPv4 Shortage?
IPv4 (Internet Protocol version 4) was designed in the 1980s with 32-bit addresses, providing a total of approximately 4.3 billion unique addresses. At that time, this seemed more than enough – no one could predict how large the internet would become.
Today, with billions of smartphones, computers, servers, IoT devices, and other connected products, these addresses have essentially run out. IANA (Internet Assigned Numbers Authority) distributed the last block of IPv4 addresses back in 2011.
Timeline of IPv4 Exhaustion
- 1981 – IPv4 specified with 4.3 billion addresses
- 2011 – IANA distributes the last IPv4 blocks to regional registries
- 2015 – North America (ARIN) runs out of IPv4 addresses
- 2019 – Europe (RIPE NCC) runs out of IPv4 addresses
- Today – New IPv4 addresses only available on secondary market
Why Did They Run Out?
Several factors contributed to IPv4 addresses running out faster than expected:
1. Explosive Growth of the Internet
From a few thousand computers in the 1980s to billions of devices today. Every smartphone, tablet, smart TV, and IoT device potentially needs an IP address.
2. Inefficient Early Allocation
In the beginning, large address blocks were distributed generously. Large companies and universities received millions of addresses – far more than they would ever use.
3. Internet of Things (IoT)
Smart watches, refrigerators, thermostats, security cameras – everything wants to be connected. The number of devices per person has increased dramatically.
How is the Shortage Being Managed?
Several techniques are used to extend the lifespan of IPv4:
NAT (Network Address Translation)
NAT allows multiple devices to share a single public IP address. Your router likely uses NAT to let all devices in your home share the same external IP.
CGNAT (Carrier-Grade NAT)
Some internet providers use CGNAT where multiple customers share the same public IP address. This can cause problems with certain services that require direct access.
IPv4 Secondary Market
Unused IPv4 addresses are now sold on a secondary market. Prices have risen from a few dollars per address to $40-50 or more per address (2024).
Consequences of the IPv4 Shortage
- Increased costs – IPv4 addresses have become a tradeable commodity
- Complicated networks – More NAT layers make networks harder to manage
- Limited innovation – Harder for new companies to get enough addresses
- Performance issues – CGNAT can affect speed and reliability
- Security challenges – Harder to trace issues when many share the same IP
The Solution: IPv6
IPv6 is the long-term solution to address shortage. With 128-bit addresses, IPv6 offers 340 undecillion (3.4 × 10³⁸) unique addresses – enough for every grain of sand on Earth to have its own address.
The transition to IPv6 is ongoing but progressing slowly. Many networks now run "dual-stack" where both IPv4 and IPv6 work in parallel.
Learn more about IPv6 and how it works →
What Does This Mean for You?
As a regular internet user, you probably won't notice much of the IPv4 shortage directly. Your internet provider handles this behind the scenes. However, you may encounter:
- Problems with certain games or peer-to-peer services (due to CGNAT)
- Difficulty running your own server from home
- Your IP address being shared with others (which can affect geolocation)
The best thing you can do is ensure your equipment supports IPv6, so you're ready for the future.