What are IP addresses and what do they mean for ecommerce?

An IP address makes communication over the Internet possible. Technically titled a Transmission Control Protocol/Internet Protocol, or TCP/IP, Web users and computer-network specialists simply refer to it as an "IP address." It enables two-way communication between digital computers, smartphones, tablets, printers, servers, scanners, routers and modems through the Internet.

Internet protocol means a set of rules or guidelines for the Web. IP addresses help govern activity online through a network grid of systematic rules, completing requested tasks across the globe.

Devices are assigned IP addresses automatically through the software in the server or router assigned to a computer. The formatting is universal, which is why computers in America can connect to those anywhere else in the world. As long as a digital device is connected to the Internet, it can be pinpointed. When one computer reaches out to another computer, both the initiating and receiving locations are identified by the online grid that uses IP addresses to connect the devices. At any given time, there are billions of connected devices that can be pinpointed around the globe using just IP addresses.

What does an IP address look like?

All IP addresses consist of four sets of numbers separated by a single period. Each number set contains one to three digits and ranges between zero and 255. A hypothetical IP address looks like this: 45.186.2.209.

Static IP addresses

A static IP address does not change over time. It is a straightforward and reliable way for digital devices to reach a particular online location. There are several key pieces of information a static IP address reveals about a particular device including the continent, country, region and city in which the computer is located, not to mention the exact latitude and longitude. It also provides information on the device's Internet service provider. This is an excellent type of IP for voice over Internet protocol and online game websites, both of which require swift connection to and identification of a device's exact location. While a static IP address may be considered slightly less secure than a dynamic IP address, practicing safe Internet usage practices should suffice in protecting users from harm. Servers, routers and firewalls usually use static IP.

Dynamic IP addresses

A dynamic IP address is not permanent. In fact, a digital device using a dynamic IP is assigned a new address each time it accesses the Internet. Static IP addresses are limited, so many Internet service providers will set aside some dynamic IP addresses to dole out to subscribers temporarily. Not only is this more cost effective for the ISP, it allows more bandwidth for subscribers than static IP addresses. Dynamic IP addresses are assigned through dynamic host configuration protocol, which allows the server to choose a new IP address each time the device signs online.

IP and ecommerce

It behooves an ecommerce store owner to obtain a dedicated (static) IP address because this helps prevent identity and information theft from completed online business transactions. Most security technology used by ecommerce operators requires static IP addresses for complete functionality. A secure sockets layer certificate, which alerts consumers that any credit card and personal data entered online is safe, requires dedicated IP. It also is better at supporting high traffic volume on an ecommerce site. For any business that wants to avoid a constantly crashing site or delivering incredibly slow page loads to users, a dedicated IP address is the best choice.

While a complete understanding of the way an IP address works isn't necessary to a successful online business, it is helpful in making some major company decisions.