Internet Protocol (IP) How To

Last Updated 10/23/2017

The Internet Protocol (IP) is a data-oriented protocol used for communicating data across a packet-switched internetwork. IP is a network layer protocol in the internet protocol suite and is encapsulated in a data link layer protocol (e.g., Ethernet). As a lower layer protocol, IP provides the service of communicable unique global addressing amongst computers. This implies that the data link layer need not provide this service. Ethernet provides globally unique addresses except it is not globally communicable (i.e., two arbitrarily chosen Ethernet devices will only be able to communicate if they are on the same bus). The difference is that IP is concerned with the final destination of data packets. Ethernet is concerned with only the next device (computer, router, etc.) in the chain. The final destination and next device could be one and the same (if they are on the same bus) but the final destination could be on the other side of the world.


Data from an upper layer protocol is encapsulated inside one or more packets/datagrams (the terms are basically synonymous in IP). No circuit setup is needed before a host tries to send packets to a host it has previously not communicated with (this is the point of a packet-switched network), thus IP is a connectionless protocol. This is quite unlike Public Switched Telephone Networks that require the setup of a circuit before a phone call may go through (a connection-oriented protocol).

Services provided by IP

Because of the abstraction provided by encapsulation, IP can be used over a heterogenous network (i.e., a network connecting two computers can be any mix of Ethernet, ATM, FDDI, Wi-fi, Token ring, etc.) and it makes no difference to the upper layer protocols. All the data link layers can (and do) have their own set of addressing (or possibly the complete lack of it) and the need to resolve IP addresses to data link addresses is needed. This resolving is addressed by the Address Resolution Protocol (ARP).


IP provides an unreliable service (i.e., best effort delivery). This means that the network makes no guarantees about the packet and none, some, or all of the following may apply:

  • data corruption
  • out of order (packet A may be sent before packet B, but B can arrive before A)
  • duplicate arrival
  • lost or dropped/discarded

In terms of reliability the only thing IP does is ensure the IP packet's header is error-free through the use of a checksum. This has the side-effect of discarding packets with bad headers on the spot, and with no required notification to either end (though an ICMP message may be sent).

To address any of these reliability issues, an upper layer protocol must handle it. For example, to ensure in-order delivery the upper layer may have to cache data until it can be passed up in order.

The primary reason for the lack of reliability is to reduce the complexity of routers. While this does give routers carte blanche to do as they please with packets, anything less than best effort yields a poorer experience for the user. So, even though no guarantees are made, the better the effort made by the network, the better the experience for the user.

IP addressing and routing

Perhaps the most complex aspects of IP are IP addressing and routing. Addressing refers to how end hosts become assigned IP addresses and how subnetworks of IP host addresses are divided and grouped together. IP routing is performed by all hosts, but most importantly by internetwork routers, which typically use either interior gateway protocols (IGPs) or external gateway protocols (EGPs) to help make IP datagram forwarding decisions across IP connected networks.