IP address (Internet Protocol address) is a fundamental concept that you need to understand, even though it’s not directly related to the business of buying and selling domain names.
An IP address is a unique string of numbers and/or letters that identifies each device — such as a computer or smartphone — that connects to the internet or a local network. It serves two main functions: host or network interface identification and location addressing.
There are two types of IP addresses: IPv4 and IPv6. IPv4 uses a numerical format separated by periods, while IPv6 uses both numbers and letters, separated by colons.
In the context of domain investing, the connection between IP addresses and domain names is through the process known as DNS (Domain Name System). When a user types in a domain name into their browser, the DNS servers translate that domain name into the corresponding IP address of the web server where that website is hosted.