Revolutionizing the Digital Asset Market
Often used to describe the nascent cryptocurrency market, the term “digital asset” is much older and means so much more. Every organization has digital assets that consist of a wide range of data, including websites, domain names, customer data, patents, branding, and yes, IP addresses. While websites, domains, and registered users garner more attention and higher valuations, IP address assets are often overlooked when evaluating a company’s worth. But where there exists a market for something, therein lies its value.
The market for domain names is well known. Domain marketplaces like GoDaddy and Sedo facilitate the sale and transfer of ownership of domain names. And as far as domain names go, their value and the interest in them stems from names that might be of particular interest or pertinence to some parties. In the case of IP addresses, their value stems not from something as specialized as the nature of the digital asset, but from their very existence.
What is an IP address?
Every device connected to the internet must have an IP address assigned to it. IPv4 defines these addresses as a 32-bit number, such as 220.127.116.11. These serve to locate any device on the internet so that devices and services can talk to one another. IP addresses are globally managed by the Internet Assigned Numbers Authority (IANA). The IANA works with five Regional Internet Registries (RIRs) that each oversee the needs of a specific geographical area. It has distributed IP addresses to the RIRs, who in turn assign them to applicants. Besides dealing with an RIR, the only way to get an IP address is to go to your Internet Service Provider and lease one for upwards of $25 per month.
Exhaustion of IP addresses
Four billion IPv4 addresses might seem like a pretty huge number. But there are more than 4 billion devices connected to the internet. It’s not surprising that we’ve been facing an IP address shortage on a global scale for the last several years.
IP address exhaustion has been widely anticipated the past 20 years. Since it came to pass in the early 2000s, the RIRs have been steadily using up their own stores of IP addresses to allocate. Of the IPv4 addresses initially made available for public use, less than 4% now remain. With some RIRs completely running out of addresses to allocate, the others have placed stringent restrictions on new applications.
To make matters worse, the demand for IP addresses isn’t limited to a single device per address. Services such as cloud, proxies, online retailing, cyber security and VPNs call for a huge number of IP addresses. And at the rate these services are expanding, demand in this sector is set to increase exponentially even as supply decreases.
IPv6 as a viable alternative to IPv4 has been in place since the early 2000s. Despite this, IPv4 remains essential, both today and into the foreseeable future. This is because most organizations have indicated no intention of disabling IPv4 or facilitating a switch to IPv6 as the cost of switching to IPv6 in training, new core equipment, and CPE replacements is too high.
The Market for IP Addresses
All these factors add up to a very critical crisis. The IPv4 shortage has led to a burgeoning of demand for IP addresses and growth of the secondary trading market. The cost of leasing an IP address has skyrocketed, for both smaller providers and end customers. Services delivered on IPv4 are witnessing both wholesale as well as retail revenue double in the last few years. And sale prices on IP addresses have increased by 50–150%.
The demand for IP addresses can be illustrated by taking a look at sectors such as VPN, Cloud or proxies. For example, the market share of Virtual Private Networks (VPNs) is expected to hit $70 billion per year by 2019. This is a sector that uses more than 20 million IP addresses — and that figure that is expected to keep rising.
1 in 4 people on the internet use a proxy today, especially in Asia and Latin America. More than 50 million IP addresses are currently employed in use for proxies, a number that is expected to double itself within the next five years. Similarly, the online marketing and retail sector is expected to be valued at 4 trillion dollars by 2020. This sector relies almost entirely on IPv4 addresses, and has displayed consistent growth over the last five years.
IP addresses also form the backbone of cybersecurity infrastructure. The internet sees more than 10,000 Ransomware attacks a year. Similarly, more than 20 million new specimens of Malware are released every year. (The AV-Test Institute registers 250,000 new forms of Malware every day.) Combating attacks of this magnitude call for more IP addresses to be available to those formulating cybersecurity measures. Cyber-attacks and threats to data have also prompted an increase in reliance on cloud services (at around 60%) — yet another sector that has been aggressive in its search for new blocks of IP addresses.
The need of the hour is to locate and identify dormant and underutilized IP addresses; and then to re-allocate them according to demand.
Challenges and the Solution
The biggest challenge here is to find and acquire available IP addresses scattered across the internet. One must then be able to maximize the utility of each individual IP address so that the needs of the market are most efficiently met.
This is where IP.Gold comes in strong. They aim to integrate Blockchain technology, machine learning and AI with a successful pre-existing business model. IP.Gold’s specially designed asset — known as the Ecosystem — facilitates the next phase of the project, i.e. re-allocation.
The primary objective of the Ecosystem is flexibility. One of its strongest features is being able to use a qualitative analysis to assign a single IP address for the use of multiple services. It allows for automation and streamlining of the entire resource intensive process.
The Ecosystem is linearly scalable. This ensures proportional increase in revenue with increase in IP addresses available. In the long term, IP.Gold will be able to increase the revenue and monetization life cycles of each IP address. Simultaneously, the company will increase their inventory of IP addresses. Blockchain technology and smart contracts will also enable secure transfer of IP addresses. Automation and AI will improve the multi-service and multi-domain opportunities, leading to lower operation costs and better economies of scale.
By scaling up its proven profitable business model, IP Gold is set to take on and vanquish the challenges persisting in the IP address arena. In this way, it is poised to present a streamlined and efficient experience to any customer in the industry.
By Anushka Sierra