For lease: IPv4 addresses, slightly used but in working order

The issue of how the Internet is running out of IPv4 addresses has been around since the 1990s. And yet it is claimed that almost 20% of the potential pool of 4.3 billion addresses are available for lease.

IPv4, the connective protocol that runs the internet, dates back to the early 1980s when the Net was still ARPANet and had a few thousand domains at best. At the time, the 32-bit addressing of TCP/IP and its 4.3 billion potential addresses was more than enough.

Then came commercialization of the Internet, mobile devices, and finally IoT, accelerating the problem. IPv6 with its 340 undecillion addresses was developed and launched in the late 1990s but adoption has been slow for myriad of reasons we won’t go into here.

So you may be surprised to know that there are millions of unused addresses in the hands of global corporations, many of them telcos and ISPs; up 822 million, according to Heficed.com, a marketplace of IP addresses where corporations can be leased by corporate buyers. Its whole business is connecting a reserve of addresses it to customers who need them.

Vincentas Grinius, CEO of Heficed, says the prices of IP addresses have drastically increased in the last year price, up 35% in one year. A single IP address is $20-$25, he says. The more you buy the bigger the discount, but prices are not going down, they are going up due to demand and limit on supply.

Among the biggest buyers is Amazon, which purchased 20 million IP addresses last year and another 8 million this year, according to Grinius. 

IP address owners can monetize their unused IP assets and bring in a new stream of revenue. In turn, this brings new opportunities for smaller ISPs and hosting providers, limited by financial capabilities, to scale their businesses, as they are able to acquire more resources in general.

But this is not like buying on eBay. A careful verification process is involved that Heficed specializes in. “We’ve been working in the IP-lease business since 2010. We know the risks and challenges. We see small and medium businesses are struggling to scale their business because the prices are too high to consider investing in IPs alone,” says Grinius.

Heficed has a Web page for the selling and purchasing of IP addresses, which private individuals are not allowed to access. It identifies customers by their business and has a process to verify that sellers can actually sell their addresses and protect against hijacking.

The company uses LOA and RPKI protocols to secure transactions and has guidelines for how much a particular prefix could cost. Address leases can run for as little as one month or in perpetuity.