Finance glossary

What is an IP Address?

Bristol James
4 Min

An Internet Protocol (IP) Address is a unique set of numbers that is attached to the internet activity of a certain computer or device. Every piece of technology that connects to the internet will have an IP address and those IP addresses make it possible for devices to transmit and receive data from other connected devices.

IP version 4 (IPv4) was the first type of IP address, and it was created in 1980. IPv4 allotted 4 billion IP addresses to be assigned, but a few years ago, we ran out of available IPv4 addresses. This led to the adoption of IPv6, a refreshed approach to IP addresses that uses more numbers and thus has a much higher number of IP addresses available.

How an IP address works

Every time you open up a search engine on your computer or phone, you’re tapping into your IP address. Here’s what happens as you online shop or play games:

  1. When you log in to your device, it’ll connect to the internet through a network that allows that connection. At home, this will be your service provider’s network.
  2. Your internet service provider (ISP) will automatically assign an IP address to your device.
  3. The IP address acts as a tag. Any activity you conduct online can be traced back to your very machine using the IP address that was assigned.
  4. If you connect to the internet from coffee shops or other public spaces, your IP address will be different, but it can still be traced back to you directly.

Different types of IP addresses

There are many different types of IP addresses in play today. Some of the key types are:

Private IP Address

All the different devices that connect to the internet on your home network will have their own IP addresses. Because the router needs to be able to identify which device to send certain information to, every internet-powered gadget has a unique identifier.

Public IP Address

A bit of a bigger umbrella, public IP addresses are associated with an entire network. So, unlike private IP addresses, these don’t refer to the specific IP addresses of each device, and instead, point to a network overall.  Public IP addresses can be dynamic or static.

  • Dynamic: These change automatically and often. ISPs have a large pool of IP addresses that they assign to customers, and the assigned IP address is meant to change. This can also provide a security boost for users.
  • Static: Static IP addresses don’t change once they’re assigned. Businesses that host their own server will need a static IP address, but for home users, dynamic is the go-to.

Security considerations and IP address risks

Hackers love to get ahold of your IP address because it provides another cover for their illicit behaviors. Be wary of anyone who reaches out via a messenger application asking for your IP address or related information. They may be using stalking or social engineering to trick you into sharing sensitive information. With that info, they can then:

  • Download Illegal Content: Pirating music and movies – or downloading graphic or illegal content — under someone else’s IP address is a foolproof way to commit crimes without being held accountable.
  • Monitor Your Location: With an IP address, hackers can track the live location of a certain device, like your phone, to follow or stalk you.
  • Endanger Your Network: With an exposed IP address, your network is a lot more vulnerable to attacks.
  • Hack Your Device: The internet uses ports associated with your IP address to move traffic to and from your devices. Anyone with your IP address can tamper with those ports.

Protecting your IP address

If you want to lock down your cybersecurity practices, consider using a proxy server or connecting to the internet with a virtual private network (VPN). A proxy server sits between your device and all other traffic, hiding your specific IP address and exposing only the IP address of the proxy server itself. A VPN routes traffic through a secure network and is great for when you are traveling or connecting to the internet in public places.

Summary

  • An IP address is a unique identifier for devices that connect to the internet, allowing them to transmit and receive data. I
  • IP addresses are assigned by your internet service provider and can be traced back to your device, even when using different networks.
  • Hackers can use your IP address to monitor your location, download illegal content, or attack your network. Be sure to use proxy servers or VPNs for ultimate protection.

References:

 

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