IPv4 addresses: the new gold!

Needless to say, though, Amazon isn't looking to sell. According to Toonk, Amazon is actually using about half of its 100 million addresses. And it recently came to light that Amazon acquired a further IPv4 address block last year, reserved for amateur radio enthusiasts (AMPRNet). The four million addresses cost Amazon 108 million dollars from the non-profit company Amateur Radio Digital Communications (ARDC). Various other big internet/cloud service providers have been buying up large IPv4 address blocks as well, including Zoom and Google.

All gone!

Late last year, RIPE NCC, the Regional Internet Registry (RIR) for greater Europe and western Asia, issued the very last IPv4 addresses. As the graphs below show, not only are there no conventional IPv4 address blocks left, but there are also no returned address blocks awaiting reassignment.

Address trading

With nothing available from the RIRs, the only option is the commercial market if you need new IPv4 addresses or want to extend your existing network. As illustrated by the following graph of RIPE NCC transfer data, a lively trade in IPv4 address blocks has developed in recent years.

Obstacle to investment

Depending on the block size, the current going rate is 20 to 25 euros per address. The graph below shows how the price of an IPv4 address has been rising steadily for years.

As a result, not only is it difficult for existing providers to bring new large-scale services to market, but market entrants also find it hard to gain a foothold. That was the case with Freedom Internet when it needed a way of providing all its customers with static IPv4 addresses.

Unused IPv4 addresses

"Finding IPv4 addresses was a problem for Freedom Internet from day one," says CEO Anco Scholte ter Horst. "We couldn't get any from RIPE NCC, so we had to look elsewhere. However, with the market price going up sharply, we couldn't buy either; Freedom's start-up capital simply wouldn't have covered the acquisition of sufficient addresses. So we decided that, for the time being, leasing was the way to go. Obviously that means that the cost price of each connection includes the IP address lease charge. Unfortunately, our cost base is therefore higher than the big established service providers, who secured large blocks of IP addresses for nothing back in the early days." "It's also a pity to see so many IP addresses remaining unused here in the Netherlands. Really, they should be returned to the market, but the owners have a dilemma, because the addresses are now worth so much. They got the addresses for nothing, but the owners are now looking to make the most of their assets. That raises ethical questions, certainly where the owners are non-commercial organisations."

Brief window of opportunity

Earlier this year, Vincentas Grinius, CEO of London-based hosting provider Heficed, predicted that the price of an IPv4 address would double in the next five years. He envisaged IPv4 address blocks as a tradeable commodity, with all sorts of associated lease constructions emerging. The going rate was likely to be about 2.50 dollars per address per year, he suggested. However, Grinius also acknowledged that there was a limited window of opportunity for monetising IPv4 address assets. Adoption of IPv6 has gained momentum in recent years, implying that the value of IPv4 addresses will peak within ten years, before starting to decline. The ARDC shares the view that IPv4 addresses are likely to start dropping in value before too long, and that was an important factor in the decision to sell.

Nostalgia

It's perhaps too soon for getting nostalgic about IPv4, but anyone interested in a nice dynamic visualisation of the historical development of the IPv4 address space, complete with explanatory info, is referred to the website of CAIDA (Center for Applied Internet Data Analysis).