22 November 2022 | 4 min read

The 6th RIR Podcast: IPv4 Depletion & Possible Solutions  

Why did we run out of IPv4? How can we alleviate the problem? Is IP leasing the answer? Here's your recap of the latest The 6th RIR Podcast episode.

Two smiling people with The 6th RIR Podcast logo in between them.

Internet Protocol version 4 (IPv4) addresses have been scarce since the Internet Assigned Numbers Authority (IANA) allocated the last unused IPs to Regional Internet Registries (RIRs) in 2011. Although the internet as we know it today simply could not exist without IPv4, the supply of this resource is finite and unable to support the ever-increasing demand. So, how can we continue using nearly 4.3 billion IPv4 addresses sustainably in a world that has over 14 billion connected devices? Paulius Judickas and Ignas Anfalovas cracked open the topic of IPv4 depletion in a recent The 6th RIR Podcast episode.  

Press play to hear the full discussion or continue reading to get the key highlights below. 

Listen to The 6th RIR Podcast on Spotify

In this episode of The 6th RIR Podcast 

Paulius Judickas – IPXO’s VP of Strategic Sales and the host of The 6th RIR Podcast – discusses IPv4 depletion and possible solutions with Ignas Anfalovas. Ignas is an Engineering Manager (Platform Team) at IPXO with more than seven years of experience in the IT sector and specializes in RIR policies, Azure services, RPKI maintenance and the overall infrastructure. Ignas also supports the IPXO Blog by providing invaluable network engineering insights. 

7 highlights from the episode 

  • We use over 14 billion connected devices  
  • There are 4,294,967,296 IPv4 addresses 
  • IPv4 was introduced in 1981, but it still trumps IPv6 
  • 420 million IPv4 addresses remain reserved 
  • Unicast extension effort would offer relief for just 5 years 
  • IPv4 prices are soaring and can reach up to $65 per IP 
  • IPv4 lease prices start at $0.40 per IP per month 

IPv4 developers failed to imagine the scale of the internet in the 2020s 

Every single internet connected device (e.g., laptop, printer or mobile device) has an IP address assigned to it. The first Internet Protocol version was introduced back in 1973. However, it was IP version 4 – introduced by ARPA in 1981 – that became the standard. 

In total, there are around 4.3 billion IPv4 addresses, and it is evident that the original IPv4 creators simply failed to imagine the scale of internet in the 2020s. Of course, back in the 80s, 4.3 billion IP addresses might have seemed like a lot of IPs. However, today, we’re dealing with IPv4 exhaustion.
Paulius Judickas

Although the IPv4 address pool is completely depleted, there are still many IP addresses that are currently not in use. If unused subnets were put back into the market – whether by selling or leasing – the impact of IPv4 depletion could be softened. 

Unicast extensions would delay IPv4 exhaustion for only 5 years 

The uncast extension effort, in theory, could partially alleviate IPv4 depletion. The goal behind the effort is to release previously reserved IPv4 addresses. This alone could add around 420 million new IPs back into the market. According to Ignas, the effort could also improve the interoperability between multiple protocols and tunnel technologies.  

Nonetheless, unicast extensions are not yet implemented, and that is most likely because they cannot offer a long-term solution. Eventually, even if almost half a billion IPs were added to the pool of usable IPs, that would simply delay the current situation we are in. 

Soon, smaller countries will run out of free IPv4 addresses to use on their infrastructure, especially since hyperscalers are buying up the IPv4 space. Unicast extensions would only delay the issue for about five years at most, which means it is not a long-term solution to IPv4 exhaustion. 
Ignas Anfalovas

Buying IPv4 is expensive, and the costs keep climbing 

Looking at BGP tables, it is evident that out of 4.3 billion IPv4 addresses, around 3.4 billion are announced. Around 420 million are unicast IPs, and the rest are forgotten and unused.  

Every year, RIRs reclaim some of that IP space to allocate it to companies that need it. However, RIRs reallocate IPs based on waiting list, and it is not uncommon for a company to wait for up to a year to get its turn to access a single /24 block (256 IPs). This, of course, cannot fulfil the growing demand for IPv4. As a result, companies choose to buy IPs.  

Unfortunately, IPv4 addresses come with a fairly steep price point, and prices just keep climbing.  

At the beginning of 2020, an IPv4 address cost around $20. Today, we’re looking at a $40 to $50 per IP price, which can go even higher if a company is looking to buy a large subnet, like a /16, in which case, IPs can reach the $55-$65 price point. 
Paulius Judickas

Another disadvantage to purchasing IP addresses relates to the time it takes to get full control of the acquired addresses. It usually takes around two to three weeks to purchase IPs, but the timeframe could be even longer, depending on the individual situation. 

IP leasing benefits both IP holders with unused resources and companies that need them 

IP leasing is a time and CAPEX-friendly option to acquiring IP addresses and ensuring the growth of a company. Could IP leasing satisfy the demand for IPv4 and reduce the impact of IPv4 depletion? According to Paulius, that depends on whether we’re talking about unicast and multicast IPs, or the unused IP space belonging to companies that received their allocations directly from IANA back in the 1980s and early 1990s. 

Paulius argues that these companies do not use IPs or perhaps have even forgotten about them. But IPv4 resources are precious and can guarantee sustained revenue through IP leasing. Many companies have already realized that. 

At the IPXO Marketplace, IP lease prices start at $0.40 cents per IP per month, and more than 3 million IP addresses – with plans to double the number in the next six months – are already available for lease. This benefits not only IP holders who wish to monetize unused resources while maintaining ownership, but also companies that need IPs to expand or even start their businesses.  
Paulius Judickas

The burden of buying IP resources for a newly found business is heavy, but IP leasing offers a cheap, easy and scalable solution. In fact, on average, a company could lease IP addresses for over a hundred months before catching up to the purchase price. 

To learn more about the advantages of IP leasing – whether you are an IP holder with untapped resources or a company in dire need of IPv4s – email Paulius at [email protected]

Let’s connect

The 6th RIR Podcast is available on Apple Podcasts, Google Podcasts, Soundcloud and Spotify. If you are interested in joining discussions or have topic recommendations, contact us at [email protected]