IP networking protocol understands addresses as 32-bit numbers. Each machine must be assigned a number unique to the networking environment. If you are running a local network that does not have TCP/IP traffic with other networks, you may assign these numbers according to your personal preferences. There are some IP address ranges that have been reserved for such private networks.
IP addresses are split up into four eight-bit numbers called octets for readability. This format is often referred to as dotted quad notation. These octets are further split into two segments
the network number, which is the leading octets and
the host number, which is the trailing octets.
The size of the host part depends on the size of the network. To accommodate different needs, several classes of networks, defining different places to split IP addresses, have been defined. The class networks are described here:
Class A comprises networks 220.127.116.11 through 127.0.0.0. The network number is contained in the first octet. This class provides for a 24-bit host part, allowing roughly 1.6 million hosts per network.
Class B contains networks 18.104.22.168 through 22.214.171.124; the network number is in the first two octets. This class allows for 16,320 nets with 65,024 hosts each.
Class C networks range from 192.0.0.0 through 126.96.36.199, with the network number contained in the first three octets. This class allows for nearly 2 million networks with up to 254 hosts.
Classes D, E, and F
Addresses falling into the range of 188.8.131.52 through 254.0.0.0 are either experimental or are reserved for special purpose use and don't specify any network. IP Multicast, which is a service that allows material to be transmitted to many points on an internet at one time, has been assigned addresses from within this range.
You may have noticed that not all possible values in the previous list were allowed for each octet in the host part. This is because octets 0 and 255 are reserved for special purposes. An address where all host part bits are 0 refers to the network, and an address where all bits of the host part are 1 is called a broadcast address. This refers to all hosts on the specified network simultaneously. Thus, 184.108.40.206 is not a valid host address, but refers to all hosts on network 220.127.116.11.
A number of network addresses are reserved for special purposes. 0.0.0.0 and 127.0.0.0 are two such addresses. The first is called the default route, and the latter is the loopback address. The default route has to do with the way the IP routes datagrams.
Network 127.0.0.0 is reserved for IP traffic local to your host. Usually, address 127.0.0.1 will be assigned to a special interface on your host, the loopback interface, which acts like a closed circuit. Any IP packet handed to this interface will be returned to them as if it had just arrived from some network. This allows you to develop and test networking software without ever using a "real" network. The loopback network also allows you to use networking software on a standalone host.
IP Address Ranges Reserved for Private Use
Some address ranges from each of the network classes have been set aside and designated "reserved" or "private" address ranges. These addresses are reserved for use by private networks and are not routed on the Internet. They are commonly used by organizations building their own intranet, but even small networks often find them useful.