An IP address is a unique number assigned to your computer to enable identification over a network. You could say an IP address is like your home address where you live, and the network traffic is like your mail, in order for the mail to be delivered correctly, the post office needs to know your address. A computer network operates in a similar way in that each computer on a network will be assigned a unique number (your address) to enable the “packets” of data (your mail) to be delivered to the correct computer. When the packets arrive at your computer, they are put back together again and become web pages, video and audio etc.

The two most common methods of assigning an IP address are:

1. DHCP (Dynamic Host Control Protocol)
2. Static IP Assignment

The first method, DHCP is automatic and widely used. With DHCP, whenever your computer connects to the network, it will be automatically assigned an IP number by the network host (another computer or router/modem) and after a time, will refresh that connection and obtain a new IP address. Now your computer (also known as a client) can send and receive data packets to/from the host over the LAN (Local Area Network), and the host can send and receive packets to/from the internet over the WAN (Wide Area Network).

The second method, static assignment, is generally only used by servers or by users who specifically request a static IP from their Internet service provider, and usually for an extra fee. With static IP assignment, IP numbers remain the same and do not change over time like DHCP addresses do. From that point on, everything works the same way as DHCP, data packets are sent and received to/from the client and host over the LAN, and to/from the host and internet over the WAN.

What does an internal IP or external IP address mean?

Confusion about networks and how they work (particularly with home networks) usually arise when we talk about the LAN, WAN, external IP address and internal IP address. So lets try and clear things up so you can have a better understanding of how a network operates.

Diagram 1.a below is a visual representation of a typical home network and WAN (click to see a larger image/diagram).

Let’s go through each number on the diagram…

1. This is a desktop computer (similar to what you would be using) which is a CLIENT on the home network LAN. It’s internal IP address is 192.168.0.2. This IP number was negotiated with modem/router which is the network HOST.
2. This is a modem which may also have a built in router, firewall, WiFi or VoIP ports but for the sake of simplicity, our example device is a basic modem with built in router. This modem/router plays two important roles on the home network:
   1. On the LAN side it acts as the network HOST and controls the assignment of IP numbers (from 192.168.0.2 to 192.168.0.254 with it’s own Internal IP address as 192.168.0.1 a.k.a default gateway) using the DHCP protocol.
   2. On the WAN side it acts as a CLIENT to the ISP’s HOST server and is assigned an IP number by that server using the DHCP protocol (the actual IP number will be different according to what ISP you are using but as an example we will use: 127.150.112.92).
3. This is your ISP’s server which acts as a HOST to your modem/router and controls the assignment of the IP number given to your modem/router using DHCP. It also verifies your modem login details and allows or disallows access to your ISP’s network.
4. Lastly is an example web server. A web server is simply a computer that stores web pages and other data files and “serves” them up to any computer that requests it. When you requested the page you are reading right now, you probably clicked on a link first, by clicking that link, your computer sent a request to your modem/router, which then sent the request to your ISP’s server, which then sent the request to our web server. Our web server then sent back this page to your ISP’s server, which then sent it to your modem/router, which finally sent it back to your computer. This transaction takes place in milliseconds.

As you can see, an internal IP address is simply an IP number on the LAN, and an external IP address is the IP number on the WAN. If a website “logs” your IP address (for instance in a forum), it will always be the WAN IP number, not the LAN.

The number system used on your LAN may be different from the above example, but the concept is the same. There are currently three (3) numbering systems reserved for private networks, they are:

• 10.0.0.1 to 10.255.255.255
• 172.16.0.1 to 172.31.255.255
• 192.168.0.1 to 192.168.255.255

Do I need an external static IP address?

Unless you have a server running 24/7 or another specific purpose, you do not really need an external static IP address. However, if you are using file sharing software (p2p) then you may need an internal static IP address so that any ports you forward from your modem/router can be attributed to it. Port forwarding and setting up static IP addresses is beyond the scope of this guide but if you would like more information please visit http://portforward.com.

If manually altering network settings is not your cup of tea, then it may be easier for you to simply enable UPnP (Universal Plug And Play) in your computers network settings. Please read the ComputerHope article on UPnP which outlines UPnP along with instructions on how to enable it.

• More information about IP Address at Wikipedia
• Help with Microsoft Windows (official)
• Search Google for IP Address