As I mentioned in the IP addressing overview, one of the ways that IP addresses are used is to facilitate the routing of datagrams in an IP internet. This is made possible because of the way that IP addresses are structured, and how that structure is interpreted by network routers.

As we just saw, each version 4 IP address is 32 bits long. When we refer to the IP address we use a dotted-decimal notation, while the computer converts this into binary. However, even though these sets of 32 bits are considered a single “entity”, they have an internal structure containing two components:

• Network Identifier (Network ID): A certain number of bits, starting from the left-most bit, is used to identify the network where the host or other network interface is located. This is also sometimes called the network prefix or even just the prefix.
  
  
• Host Identifier (Host ID): The remainder of the bits are used to identify the host on the network.

As you can see in Figure 57, this really is a fairly simple concept; it's the same idea as the structure used for phone numbers in North America. The telephone number (401) 555-7777 is a ten-digit number usually referred to as a single “phone number”. However, it has a structure. In particular, it has an area code (“401”) and a local number (“555-7777”).