IPv4 Price History
Take a closer look at how IPv4 sale and lease prices have changed throughout the years. Discover how IPv4 prices will change in the future.
The demand for IPv4 addresses continues to grow, but the supply is low these days. Unsurprisingly, we can observe big changes throughout the IPv4 price history.
Internet Protocol version 4 carries the Internet. However, in theory, there are no IPv4 addresses left. This phenomenon is known as IPv4 exhaustion, and it is a global problem that has affected all five Regional Internet Registries (RIRs) in one way or another.
In this report, we discuss the depletion of IPv4 addresses, the factors that influence the steady rise of IPv4 prices and the historical changes within the market. We also analyze the value of selling IP addresses and the alternatives to losing IP ownership.
When did we run out of IPv4 addresses?
IPv4 resources are becoming a commodity, and that is because we ran out of IPv4 addresses much quicker than expected.
The Internet Assigned Numbers Authority (IANA) exhausted its free pool of available resources in 2011. The organization divided the available address space according to the RIRs’ needs up until that point. Although it no longer has new IP addresses to spare, IANA is still responsible for the global coordination of the IP addressing systems and Autonomous System Numbers (ASN).
According to Geoff Huston, APNIC – the RIR of the Asia-Pacific region – was the first to run out of allocated IP addresses in 2011. Other RIRs followed suit: RIPE NCC (Europe and parts of Asia) in 2012, LACNIC (South America and parts of the Caribbean) in 2014 and ARIN (North America and parts of the Caribbean) in 2015.
AFRINIC entered the so-called IPv4 exhaustion phase 2 at the beginning of January. Therefore, the RIR now offers the minimum allocation size of /24 subnet and the maximum of /22.
APNIC allocates /23, while ARIN supports micro allocations of /24 to organizations that transition to IPv6. LACNIC is awaiting recovered and returned addresses so that it can re-allocate them to the waiting list members. RIPE NCC has also introduced a waiting list.
Why do we buy IPv4?
IP addresses enable all internet-connected devices to communicate. That includes servers, desktop computers, smartphones, printers, smart home cameras, smart TVs and so on. The good news is that regular internet users don’t need to buy IPs or even configure them.
Internet service providers are responsible for allocating IPs to their customers, and ISPs get their resources from the RIR operating in their geographical region. IANA is responsible for splitting the entire IPv4 address space among RIRs.
Companies hoard IPv4 addresses
Needless to say, ISPs, hosting providers and companies of all sizes need IP addresses to run and also scale their operations. Companies may choose to buy IP addresses because they may want greater control over their networks, due to security concerns or simply because they understand the financial value of resources that are in high demand. IP addresses are becoming a hot commodity.
The problem here is that quite a few companies hoard IP addresses seemingly without a purpose. Some may not care to utilize IP addresses, and others may not know the revenue potential. In any case, even though, in theory, we have run out of new IP addresses, around 20% of global IPv4 resources remain unused.
According to the Head of Sales at IPXO, Paulius Judickas, IPv4 prices grew by almost 250% in the last two years. He added:
Judickas added that since 2018 IPv4 lease prices have almost tripled, which directly correlates to IPv4 sale prices. According to IPXO’s data, there’s a 6-8 month gap between the increase of IP sale prices and the increase of IP lease prices.
Big companies purchase IPv4 addresses
To obtain IPv4 resources, you can become a member of an RIR and, potentially, enter a waiting list. This means that you have to wait for resources that the RIR obtains during IP re-allocation or transfer. Alternatively, you can also use the services of IP brokers, who handle IP transfers and help buy or sell IP addresses.
In 2011, Microsoft obtained 666,624 IPv4 addresses from Nortel, a Canadian telco that went bankrupt. The company paid $7.5 million (USD), or $11.25 per IP address, which was not a small price to pay in 2011. By this time, it was already clear that IPv4 addresses were running out rapidly, and Microsoft’s purchase indicated that changes were coming to the IPv4 market.
In 2017, Google purchased the entire /12 block, consisting of 1,048,576 IP addresses. Amazon was also very active in purchasing IP addresses between 2017 and 2019. According to reports, the company purchased 8 million IPv4 addresses from MIT, 16 million from General Electric and 4 million from AMPRNet.
At an average cost of $15-25 per IP at the time, the company could have paid close to $420-700 million. Today, the same resources would go for about $44-50 per IPv4 address, which is $1.2-1.4 million. In just a few years, the price has doubled, which perfectly illustrates how quickly IPv4 addresses are becoming a desirable commodity.
What influences IPv4 selling prices?
IPv4 prices continue to grow each year, and while you might have purchased one IP for around $5-10 a decade ago, today, you would have to allocate from $44 to $50 for the same resource.
Several key factors influence the global IPv4 sale prices:
- Supply and demand are out of balance
- The transition to IPv6 is slower than expected
Supply and demand imbalance
According to statistics, in January 2021, there were 4.66 billion internet users worldwide, and this number has surpassed the total number of IPv4 addresses. There are 4.29 billion unique IPv4 addresses in total, and when the Internet Protocol version 4 emerged in the 1980s, this seemed like an abundant number of resources.
Internet architects quickly learned that the 4.29 billion IPs would run out and much quicker than anyone could have imagined. The Internet Stream Protocol, which is famously known as IPv5, never left the experimental phase. However, IPv6, introduced in 1995, seemed to offer an excellent alternative. Nonetheless, IPv6 adoption rates have been disappointing.
Slow IPv6 adoption
The IPv4 vs. IPv6 debate is gaining more traction these days, but we believe that IPv4 will continue to be the backbone of the internet for the foreseeable future. Why is that so? First and foremost, IPv4 manages to satisfy the needs of internet users. Network Address Translation (NAT) plays a huge part in this.
Every internet-connected device requires a unique IP address, but there are more than 4.29 billion devices in the world. NAT consolidates multiple private IPs into fewer public IPs, which helps conserve the limited IPv4 addresses.
Moreover, IPv6 adoption requires immense resources. Replacing equipment, training IT teams or hiring IPv6 experts and transitioning users is not appealing to companies that are still fully functional without IPv6. Even some ISPs aren’t ready for the shift.
Mobile network operators are definitely leading in IPv6 adoption. According to some reports, Verizon and AT&T are at 80% of IPv6 adoption, and T-Mobile is nearing 100%. Nonetheless, IPv6 connectivity among Google users data shows only 37% of IPv6 adoption globally.
How do IPv4 transfers work?
IP address transfer indicates the move of the resource from one entity to another. Transfers can be requested by resource holders, who are either Local Internet Registries (LIR) or the end-users represented by them. Request procedures differ, depending on individual RIRs’ policies.
We can take RIPE NCC as an example. This RIR requires that transfers occur between LIRs and end-users that LIRs sponsor. IPv4 addresses cannot be transferred for 24 months if received from the RIR, transferred from another organization or after a merger/acquisition.
RIPE NCC supports inter-RIR transfers; however, the transfer is not possible until both RIRs approve it, and, as you already know, different RIRs have different policies. Furthermore, RIRs have different relationships.
RIPE NCC only facilitates IPv4 transfers with ARIN, APNIC and LACNIC. All four RIRs have inter-RIR compatible policies, but AFRINIC does not. Naturally, inter-RIR transfers are not possible between AFRINIC and the other four RIRs.
It should come as no surprise that transferring resources comes with a price. For example, when transferring resources from LACNIC, an administrative fee between $1,000-1,500 (depending on the size of the subnet) must be paid.
Since 2012, we’ve seen more than 370 million IPv4 addresses transferred. Clearly, IPv4 resources are moving between entities quite vigorously. Undoubtedly, IPv4 transfers impact IPv4 sales and, consequently, IPv4 lease prices.
We are likely to see the record number of IPv4 transfers in 2021. We cannot wait to find out what the numbers reveal at the end of this year.
IPv4 sale price history overview
Comprehensive historical data on global IPv4 prices or IPv4 transfer deals throughout the years doesn’t exist. Such data is simply not revealed by RIRs, LIRs and the IP brokers that help buy or sell resources. Nonetheless, some information has been made public, and we can piece together the details we have to make up the bigger picture.
You could have bought a single IPv4 address for around $10-15 in 2017. The average price per IPv4 address grew to around $15-20 in 2019. According to our statistics, /24, /23 and /22 blocks were the most popular at the time. If sold at $20 per IP, the blocks were worth $5,120, $10,240 and $20,480, respectively. Not too shabby for something intangible.
According to the historical data accumulated by Hilco Streambank’s IPv4 brokerage division, IPv4 prices have risen significantly within the last decade. The graph below shows the average price per IPv4 address in USD.
According to the data of this single IPv4 brokerage, IPv4 sale prices went up from around $6-24 per IP in 2014 to $23-60 per IP in 2021. The differences between the lowest and highest sales per IP were relatively modest up until this year. In 2021, however, we’ve seen a significant jump.
The highest sale prices per IP address were recorded in September and October 2021. Resources allocated by RIPE NCC and ARIN were sold for $60 per IP address. RIPE NCC allocations were sold for $15,360 for the entire /24 block, and ARIN’s allocations were sold for $61,440 for the /22 block and $30,720 for the /23 block.
In June 2021, IP brokers sold resources allocated by ARIN for $59.07 per IP address ($15,122 for the entire /24 block). This indicates that the $60/IP address sale price is not a fluke. We can expect the prices to go up more.
You can find historical IP sale data from 2014 to 2021 in the table below. The data represents allocations from different RIRs and both lowest and highest prices per IP in blocks /24-/15.
Unsurprisingly, the biggest sales are associated with the /15 subnet, the biggest block (131,072 IPs) in the available data. Two blocks allocated by ARIN were sold for $4.19 million and $5.06 million in May 2021 and June 2021, respectively.
It’s important to note that this data represents IP sale information from one independent IPv4 brokerage. Moreover, we cannot determine the administrative fees that could have been part of the publicized sales. Ultimately, each IPv4 brokerage sets its own prices.
Needless to say, this is just one piece of the puzzle that IPXO analysts use to get a clear picture. While we look at this data with a grain of salt, it helps us understand the state of today’s IPv4 market overall.
Leasing IPv4 vs. selling IPv4
As we have already discussed, IPv4 lease prices directly correlate with IPv4 sale prices with a delay of around 6-8 months. That means that we can predict how the IP lease prices will change in the near future. The current data shows that the lease prices will continue to go up.
In 2021, IPv4 lease prices ranged from $0.37 per IP (/16 block in June-August) to $0.90 per IP (/22 block in April).
Our data shows that IPs in /16 and /17 subnets come at the lowest cost, at average lease prices of $0.59 and $0.48, respectively. IPs in /22 – /24 subnets are the most expensive, at average lease prices of $0.76, $0.77 and $0.78, respectively.
As IPv4 prices continue to go up due to the shortage of resources and sluggish IPv6 adoption, some IP holders are, literally, holding onto their assets in the hopes of making more money in the future. That said, there are a few issues associated with selling IP resources. The biggest of them being that when you sell, you are signing up for a one-time deal.
Even though IPv4 resources were once free, the scarcity has created a secondary market, in which unused resources are put back into the market for a fee. At the end of the day, someone is always willing to pay for the assets they need. And we know very well that IPv4 addresses are in high demand.
According to the IPXO revenue calculator, the average lease price per IP, at the moment, is between $44-50. Let’s say you want to sell your /24 subnet, which is the most popular in the lease market. The /24 subnet contains 256 IPv4 addresses. Therefore, if the lease price per IP address is $44, you could earn $11,264.
However, if you sold your assets, you would lose resource ownership, recurring revenue and yield gains. On the other hand, if you chose to lease your IP addresses, you would retain ownership and ensure recurring revenue and yield gains.
According to the calculations in the image above, you could make more money by leasing your IPs instead of selling them in just under a year. The good news is that, currently, there’s no limit to how long you can lease your resources. Sure, IPv6 adoption may speed up; however, the demand for IPv4 resources is unlikely to halt any time soon.
IPXO’s CEO, Vincentas Grinius, shared his thoughts on the growing adoption of IPv6 deployment in the future:
Overall, leasing IPv4 resources is beneficial in more ways than one. The IP resource holder can unlock a new revenue stream. At the same time, the lessee – the person who rents the resources – can start scaling their business, which, at this time, may be impossible without IPv4 addresses.
As a result, IPv4 leasing offers significant relief to IPv4 exhaustion and contributes to the growth of the sustainable internet.
Even if you decide to sell your IPv4 resources one day, there’s no point in keeping them idle today. It has never been easier to monetize IP addresses and create a stable revenue stream.
The dark side of the IPv4 world
Whether you choose to sell or monetize IPv4 addresses, you have plenty of options to do it safely and legally. Unfortunately, not everyone is willing to play by the rules.
The black market is booming
Anything that is in high demand eventually attracts shady business. The IPv4 black market is growing, and IP holders need to look after their resources closer than ever before.
In 2019, Amir Golestan from Charleston, S.C., managed to obtain 757,760 IP addresses from ARIN just so he could sell them on the black market. The US Department of Justice charged Golestan on twenty counts of wire fraud.
According to the Department of Justice, the number of IP addresses obtained by Golestan could have been worth between $9.8-14.4 million. ARIN uncovered the fraud when it found that numerous bogus companies obtained small blocks of IPv4 and then resold them to third parties.
That same year, reports emerged suggesting that AFRINIC resources worth 1.3 billion ZAR were stolen and sold on the black market. Shockingly, the theft was an inside job.
Unprotected IPv4 addresses are at risk
The black market often relies on the use of hijacked IP addresses. Hackers perform BGP hijacking to corrupt internet routing tables and take over IPs. The hijacked resources go to malicious parties, who may exploit them for spamming and other malicious activities.
Spamming is not only annoying or potentially dangerous. If a hijacked IP address is used for spamming, the reputation of that IP may be tarnished. That is because when suspicious or malicious activity is associated with an IP address, it is blocklisted. IP blocklisting is a kind of IP filtering system that, in most cases, is set up to filter email traffic.
With IPv4 prices at an all-time high, IP-related security issues require close attention from everyone involved. That includes cybersecurity experts, IP holders, ISPs, RIRs and also those who help manage IP resources.
IPXO’s anti-abuse team ensures top-level abuse management. Real-time IP address monitoring and daily IP health checkups are set up to maintain IP reputation and keep both lessors and lessees safe.
The future of IPv4 prices
As the global population expands and the number of internet-connected people grows, the IPv4 space becomes smaller and smaller. While we await wider adoption of IPv6, we have to find ways to make do with the resources we already have.
According to historical projections, IPv6 should have replaced IPv4 by now. Clearly, that hasn’t happened yet. That is, largely, thanks to Network Address Translation technology. All in all, it is difficult to say how quick (or slow) IPv6 adoption will be, but we believe that IPv4 will continue to be the backbone of the internet. Quite possibly, throughout the entire 2020s, too.
Once IPv6 catches up to IPv4, we should see IPv4 sale and lease markets stabilizing. For now, however, both sale and lease prices are in an upward motion. While selling IPv4 resources might seem like a good option, data and numbers show that, at this time, monetizing IPs by leasing them is more profitable than selling IPs. In fact, it may take just under one year to attain greater revenue compared to a one-time sale.
At IPXO, we invite IP holders to monetize unused IP addresses, enrich the current market and help businesses around the world scale with the help of IPv4 resources. If you are yet to join the IPXO Marketplace, your fully automated IP address lease & monetization platform, watch our webinar to learn more.