In early 2015, some of the largest tech companies in the world started experiencing problems with their IP addresses. At an annual industry conference, a top Microsoft network expert said to the audience that the company had been having problems with IP. The serious problem that has managed to sneak up on Microsoft is an acute shortage of IPv4 addresses. This problem was about to get much worse, but IPXO has come up with some ingenious solutions. Take some time to understand the problem and the groundbreaking solution on offer.
What Exactly is the IPv4 Address Shortage?
Most of the IP addresses being used by businesses and individuals today are IPv4 addresses. IPv4 was first released along with the ARPANet in 1983. This technology uses a 32-bit address space protocol, which is why there are only 4.29 billion addresses available. The internet has grown exponentially over the last 20 years, and the number of available IP addresses is falling. The primary address pool was exhausted on 3 February, 2011.
There is a newer version of IP called IPv6, which has been around since 1998. However, it is not possible for all existing entities to make the switch from IPv4 to IPv6. The main reason behind it is the fact that these two systems are not interoperable with each other. Total IPv6 deployment is going to take a very long time, and this situation has exacerbated the shortage issue. IPXO has come up with a very innovative solution to this.
An Economic Solution to the IPv4 Address Shortage Issue
IPXO is the only entity that came up with a very innovative and simple solution to this scarcity problem. The overwhelming shortage of IPv4 addresses mainly occurs due to two reasons –
- Large corporations all over the world are sitting on a vast unused stock of IPv4 addresses. New entities and small businesses looking to buy IPv4 addresses have to buy them directly from the corporations at a very steep price. In short, the firms are creating the market scarcity conditions themselves.
- This shortage situation has led to the emergence of an IPv4 secondary market, which is irrefutable evidence that IPv4 address blocks are a very valuable asset. Companies tend to sit on their unsold and unused address blocks for a long time since they won’t let it go at low prices.
To alleviate this problem, the IPXO foundation came up with a simple solution. They set up an IP marketplace that matched the demand and supply of IPv4 addresses. Firms sitting on large blocks of IPv4 addresses were matched with small business owners who were desperately looking for usable IPv4 addresses.
How is IPXO’s IP Marketplace Unique?
Right now, IPXO is the only place in the world where IPv4 addresses are available for lease for a limited time period from interested renters. The main function of the platform is to act as a matchmaker between people looking to rent out their unused address blocks and people who want affordable IPv4 addresses. This is a unique solution that will tide the situation very well until large-scale shifts of businesses to IPv6 become possible.
Over a period of 5 years, more than 350 million IPv4 addresses got transferred from one entity to another. Around 2015-2016, IPv4 addresses cost $18-25, depending on the size of the subnet associated with the address. In 2019, the cost of the same IPv4 addresses had shot up to $25-30. 93% of all available IPv4 addresses are actually held in bulk by Internet Service Providers (ISPs), IP Transit providers, and IP hyperscalers. SMEs hold only 0.24% of the market share.
Why Leasing IPv4 Addresses is a Good Idea
The main USP of the IPXO marketplace is that it is a platform where IPv4 addresses can be leased for a fixed period of time. But why should companies consider leasing seriously? Why is it a better and more attractive option for them than directly buying an IPv4 address for continued usage?
- Buying IPv4 address blocks is an extremely expensive affair, and not every business just starting out can afford the price. Leasing through IPXO, however, is a very easy and cost-efficient solution that will provide them access to a functioning IPv4 for a fixed time period. There isn’t any long-term commitment.
- Even if a business has the means to purchase IPv4 addresses, there is a shocking scarcity of addresses available for sale. IPXO battles this asymmetry of information by providing a platform where interested renters can directly connect with address owners. This helps to equate the demand and the supply properly.
- You should also remember that the ownership transfer process is very lengthy. The buyer and the seller have to navigate a lot of bureaucratic red tape put in place by the Regional Internet Registry (RIR). A lot of justification and paperwork needs to be done just for the ownership transfer.
- Renting out unused IPv4 addresses is also a very attractive proposition for businesses. A business can make a healthy amount of money in the form of lease payments just by renting out blocks of IPv4 addresses they do not require. Renters can also save a lot of money by renting.
How IPXO Prevents Blacklisting & Abuse of IPs
Lastly, you should be aware of IP blacklisting. ISPs and watchdog institutions blacklist IPs that engage in malicious activities. To make sure that business-owned IPs don’t get misused by renters, IPXO has a very strict regulatory process in place. They have an in-depth monitoring channel where they watch out for instances of IP abuse. Businesses will be able to make a good bit of cash by renting out all their unused address blocks.
The Final Word
This is basically all you need to know about the IPXO marketplace, which is all set to launch in 2021. If you’re a startup looking for a cheap IPv4 address block, then you know who to approach for your needs. In the same vein, businesses sitting on unused address blocks can approach the IPXO marketplace as a safe way to make a good deal of passive income.