Why I am not buying IPv4 addresses as an investment
Despite rising prices, a new analysis argues IPv4's future is uncertain due to CGNAT and IPv6 adoption.
A viral analysis by Samuel Shadrach on LessWrong argues against investing in IPv4 addresses, despite their historical price appreciation. The core of his thesis hinges on two major technological shifts: the adoption of Carrier-Grade NAT (CGNAT) by ISPs and the gradual transition to IPv6. CGNAT allows multiple end-users to share a single public IPv4 address via port mapping, dramatically extending the utility of the existing ~4.3 billion address pool. Simultaneously, while the full shift to IPv6-only networks is slow, dual-stack deployment (supporting both IPv4 and IPv6) is increasing, reducing pure reliance on scarce IPv4 resources.
Shadrach identifies a critical market tension: large website owners and cloud providers (AWS, GCP, Azure) may continue paying high prices for IPv4 to maintain compatibility, but ISPs are financially incentivized to implement CGNAT rather than buy expensive addresses or force a disruptive IPv6-only transition on users. This creates high uncertainty about future price direction. His research, conducted in late 2024, concludes that it's unclear if IPv4 address exhaustion will continue to drive prices up, or if CGNAT and IPv6 adoption will ultimately cap or even reduce their value, making them a speculative and risky investment.
- CGNAT technology allows ISPs to serve many users with one IPv4 address, potentially alleviating scarcity.
- The slow adoption of dual-stack IPv6 reduces pure IPv4 dependency, creating market uncertainty.
- Large cloud providers may sustain prices, but ISP economics favor CGNAT over buying expensive addresses.
Why It Matters
For network engineers and investors, this analysis highlights the complex technological forces that could deflate a seemingly scarce digital asset.