- Limited IPv4 supply and high demand have elevated IPv4 holdings into valuable, investable digital assets.
- Policy, governance and market inefficiencies shape IPv4’s price discovery and affect telecom and cloud sector valuations.
The scarcity of IPv4 addresses has shifted a long-overlooked technical resource into a tradable digital asset, creating new strategic and financial opportunities for organisations globally.
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Introduction
In the midst of global digital transformation, something as seemingly mundane as an IPv4 address has quietly become a strategic and investable asset. The fundamental numerical identifiers that allow devices to connect and communicate on the internet were once treated as technical utilities. Today, with the free pool of IPv4 addresses fully allocated and demand continuing to grow, these addresses are traded, leased and valued in secondary markets. This shift reflects scarcity economics, enterprise strategy and broader debates about digital infrastructure governance.
In this report we look at why IPv4 scarcity has transformed these technical resources into investable assets, how markets and governance structures affect pricing and liquidity, and what this means for network operators, cloud providers, investors and policymakers.
Understanding IPv4 and its scarcity
IPv4, or Internet Protocol version 4, is the foundational addressing system for the modern internet. An IPv4 address is a 32-bit numerical label that uniquely identifies a device or network endpoint on the internet. Because the address space is limited to around 4.3 billion unique identifiers, and because roughly 3 billion are actually usable, this finite pool has been exhausted for more than a decade.
The exhaustion has significant implications. Unlike other digital resources that can scale with demand, IPv4 cannot expand without a transition to IPv6, a newer protocol with vastly larger address space. The slow adoption of IPv6 means that IPv4 remains critical for many enterprise services, legacy systems and global networks, keeping demand high even as supply is capped. This mismatch creates a classic scarcity condition: too much demand chasing too few resources.
Why IPv4 is now treated as an asset
Scarcity meets demand
A fundamental principle of economics is that when supply is fixed and demand increases, the price of a resource tends to rise. In the case of IPv4, the free allocations ceased in the early 2010s when the pools held by Internet Assigned Numbers Authority (IANA) and regional registries were depleted. Since then organisations requiring more IPv4 space have had to turn to secondary markets where numbers can be transferred between holders.
This secondary trading is not merely a technical exchange. Enterprises, carriers and cloud providers view IPv4 blocks as strategic assets. Having a block of IPv4 addresses can mean the ability to scale services, comply with legacy network dependencies and maintain consistent internet presence.
IPv4 as digital real estate
According to Lu Heng, a leading voice on number resource economics, IPv4 addresses have historically been undervalued. In his analysis he states:
“IPv4 addresses remain one of the most undervalued assets in the global digital economy. Their suppressed valuation is not accidental; it is structural.”
Lu Heng, CEO at Cloud Innovation, CEO at LARUS Ltd, Founder of LARUS Foundation.
This means that policy, governance and market inefficiencies have kept prices lower than their potential economic value.
Heng goes further, arguing that these addresses function much like scarce urban land or spectrum because they are indispensable service enablers. In fact, he suggests that IPv4 holdings already represent material portions of valuations for some telecom companies, even if current market prices remain muted.
In his own words:
“Every ISP’s balance sheet is affected by IPv4 holdings.”
Lu Heng, CEO at Cloud Innovation, CEO at LARUS Ltd, Founder of LARUS Foundation.
Secondary market evolution
Secondary markets for IPv4 addresses involve brokers, marketplace platforms and leasing hubs. Organisations with excess IPv4 blocks can sell or lease them to those needing additional capacity. According to IPv4.Global, one of the largest marketplaces, leasing hubs provide flexible options for businesses seeking addresses without heavy upfront capital.
Price trends reflect scarcity economics. Industry data suggests that per-address prices have climbed from around USD 10–15 in the early secondary markets to USD 35–USD 60 or more recently. These prices vary by region, block size and buyer urgency. Market participants often debate whether this pricing reflects intrinsic value, speculation or regulatory inefficiencies.
Also Read: How IPv4 asset strategy supports long-term enterprise growth
The economics of IPv4 scarcity
Asset valuation challenges
Mapping IPv4 to traditional asset classes is complex because of legal and governance questions. Regional Internet Registries (RIRs) administer address allocations and enforce policy. They do not grant full ownership in the way a financial asset or property title might. This ambiguity inhibits full liquidity and creates friction in trading.
Lu Heng highlights this issue, noting that buyers pay significant sums for addresses but
“registries insist the addresses are not truly owned and cannot be freely resold. This is not how real assets function.”
Lu Heng, CEO at Cloud Innovation, CEO at LARUS Ltd, Founder of LARUS Foundation.
Without recognised ownership, markets remain immature and prices can be suppressed below potential.
Also Read: IPv4 market trends, demand pressures and an uncertain outlook
Liquidity constraints
Liquidity measures how easily assets can be traded without affecting price. The global IPv4 market is estimated to be worth hundreds of billions, but the annual transfer volume is relatively low. According to Heng’s analysis, liquidity is under 1% of the total market value per year. This lack of turnover makes price discovery challenging and discourages some forms of institutional investment.
| factor | impact on IPv4 pricing |
|---|---|
| fixed supply | creates scarcity premium |
| demand from cloud/enterprise | pushes prices up |
| governance limits on transferability | suppresses liquidity |
| ambiguity over ownership rights | restricts asset class development |
| secondary market growth | supports price discovery but is nascent |
This table summarises how economics and governance interact to shape IPv4 pricing and investability.
How businesses view IPv4 assets
Strategic holdings
For large network operators and cloud providers, IPv4 blocks are more than utilities. They are strategic assets that ensure service continuity and customer reachability. The cost of migrating entirely to IPv6 remains significant, particularly for legacy applications that do not support the newer protocol. As a result, many organisations prefer to hold or lease IPv4 blocks to meet operational needs.
Investors and executives in the telecom and cloud sectors increasingly evaluate IPv4 holdings as part of strategic asset management. According to industry commentators, IPv4 holdings can significantly affect an operator’s ability to secure customers and offer differentiated services.
Leasing and trading
Leasing IPv4 addresses provides a revenue stream for holders and a flexible acquisition model for lessees. Marketplaces facilitate leases that allow companies to expand their networks without committing to large upfront purchases. This flexibility is particularly valuable in fast-growing markets and emerging economies.
Trading and brokerage platforms also exist that connect buyers and sellers, much like other financial markets. These services help organisations navigate registry policies, ensure compliance and manage reputation issues associated with address history.
Governance and policy influences
RIR roles
Regional Internet Registries such as ARIN and APNIC manage the allocation of IP addresses within their regions. Their policies influence who can acquire addresses, how transfers are approved and what documentation is required. These frameworks affect market behaviour and asset valuation.
For example, policies requiring “needs tests” or holding periods before transfer can slow transactions and reduce liquidity. Critics argue that these constraints are outdated and inhibit efficient markets. Reform advocates suggest clearer ownership recognition and simplified transfer policies could unlock substantial value.
Regulatory barriers
While new allocations of IPv4 addresses have ceased, regulatory and procedural hurdles remain. These include verification of need, transfer approvals and compliance with regional policies. Address owners often navigate a web of rules that vary by registry, complicating cross-border transactions and corporate strategy.
Lu Heng has been vocal in critiquing aspects of governance that stifle asset recognition and liquidity. His work emphasises that policy choices, rather than technical limitations, largely determine the economic potential of IPv4 assets.
Risks and criticisms
Turning IPv4 into an investable asset class is not universally accepted. Critics point to several risks:
- speculative bubbles: Scarcity can invite speculation that detaches prices from intrinsic network value.
- blacklisted addresses: Poor address history can damage market value and restrict usability.
- regulatory uncertainty: Shifting policies can affect asset rights and market dynamics.
Industry analyses highlight these issues, cautioning against simplistic assumptions that IPv4 scarcity alone guarantees reliable investment returns.
What the future holds
The transition to IPv6 will continue, but for the foreseeable future IPv4 will remain an integral part of the internet’s infrastructure. Whether IPv4 assets become more widely recognised in financial markets depends on policy reforms, market maturation and corporate strategies.
Some see potential for dramatic valuation shifts if liquidity improves and ownership rights become clearer. Others warn that fundamental technical change to IPv6 could eventually reduce IPv4’s strategic importance. For now, IPv4 scarcity remains a central feature of internet economics.
IPv4 scarcity through a human and institutional lens
Behind the technical debates and market charts are people making decisions under pressure. Network engineers are tasked with keeping services online. CFOs must justify capital expenditure for address acquisitions. Policymakers wrestle with governance models that were never designed for scarcity economics.
For many operators, IPv4 scarcity is not an abstract market concept but a daily operational constraint. A regional ISP expanding into a new city may find that customer growth is limited not by fibre rollout or demand, but by the availability of routable IPv4 space. Cloud providers face similar bottlenecks when onboarding enterprise clients whose systems still depend on IPv4 connectivity.
This operational reality is what gives IPv4 addresses their tangible value. As Lu Heng has written,
“IPv4 is not scarce because the internet failed. It is scarce because the internet succeeded.”
Lu Heng, CEO at Cloud Innovation, CEO at LARUS Ltd, Founder of LARUS Foundation.
This framing is important. Scarcity here is not a flaw, but the outcome of decades of growth layered on top of a finite technical foundation.
From an institutional perspective, IPv4 scarcity exposes a mismatch between technical governance and economic reality. Internet number resources were historically managed as shared infrastructure, allocated based on demonstrated need. That model worked when supply exceeded demand. It struggles in a world where scarcity is permanent.
Heng argues that this mismatch creates hidden costs.
“When a scarce resource is treated as if it were abundant, value does not disappear. It simply moves off the balance sheet and into inefficiency.”
Lu Heng, CEO at Cloud Innovation, CEO at LARUS Ltd, Founder of LARUS Foundation.
In practice, this means higher operational costs, slower network expansion and opaque cross-subsidies between incumbents and new entrants.
The result is a market that exists, but only partially. IPv4 addresses are bought, sold and leased every day, yet the rules governing them stop short of recognising them as full economic assets. This halfway position shapes behaviour. Some organisations hoard address space defensively. Others lease aggressively. Few treat IPv4 with the same long-term planning discipline applied to spectrum, property or other critical infrastructure assets.
There is also a human dimension to trust and reputation. An IPv4 block carries history. Addresses previously associated with spam or abuse can be difficult to rehabilitate, reducing their usability and market value. Buyers must conduct due diligence, not unlike purchasing second-hand property with a troubled past. This reputational layer further reinforces the idea that IPv4 addresses behave like assets, not interchangeable commodities.
Looking ahead, the narrative around IPv4 is likely to evolve rather than disappear. IPv6 adoption will continue, but transition timelines are measured in decades, not quarters. During that period, IPv4 scarcity will continue to influence investment decisions, mergers, service pricing and even geopolitical digital capacity.
As one industry observer put it, the internet no longer runs purely on protocols. It runs on incentives. IPv4 scarcity has made those incentives visible. Whether the ecosystem responds with clearer asset recognition, improved governance or prolonged friction will determine how efficiently the digital economy grows from here.
In that sense, IPv4 addresses are no longer just numbers. They are a mirror reflecting how the internet manages scarcity, value and responsibility in a mature, interconnected world.
Also Read: Why protecting the number registry system has become a question of stability
FAQs
1. Why has ipv4 scarcity emerged?
IPv4 scarcity emerged because the total number of IPv4 addresses (approx 4.3 billion) was fully allocated decades ago and no new addresses can be issued under the current protocol. Demand continues due to legacy systems and ongoing network growth.
2. How are ipv4 addresses traded?
IPv4 addresses are traded on secondary markets through brokers and marketplaces that facilitate transfers between holders and buyers, often under registry policies.
3. Does owning ipv4 provide legal property rights?
Current governance models do not grant full legal ownership in the traditional sense; registry policies impose use rights and restrictions, which limits unrestricted trading.
4. How do businesses monetise ipv4 holdings?
Businesses can monetise holdings by leasing addresses to others or selling them to organisations in need of additional space.
5. Will ipv6 make ipv4 assets obsolete?
While IPv6 offers vastly more addresses, the transition is incomplete and many systems still depend on IPv4, meaning IPv4 assets remain relevant for years to come.
