Is an IP address an asset or a liability?

With IPv4 scarcity and markets emerging, organisations must balance their digital capital’s potential value against operational and reputational risks.

• IPv4 addresses have increasingly behaved like scarce digital assets with quantifiable market value.

• Yet they can also pose liabilities due to reputation, governance and security challenges.

What an IP address really is

An Internet Protocol (IP) address is a numerical identifier assigned to networked devices that enables data to be routed between them. IPv4, the fourth version of the protocol, offers roughly 4.3 billion unique addresses and remains the dominant address family on the global Internet today. Despite plans for migration to IPv6, IPv4 continues to underlie most network communication.

Originally designed purely as a technical identifier, the exhaustion of unallocated IPv4 space and the ongoing demand for connectivity services have transformed some blocks of these addresses into market-traded resources.

How IPv4 scarcity creates economic value

The finite nature of IPv4 makes it functionally scarce. With the global unallocated pool exhausted years ago, organisations that need extra address space often turn to secondary markets where IPv4 blocks are bought, sold or leased.

According to secondary-market data, pricing for IPv4 addresses has risen significantly over time, with average per-address valuations climbing into the tens of US dollars range.

This scarcity-driven valuation is why some analysts describe IPv4 as a form of digital capital. As one industry commentary notes, IPv4 address space is now “a strategic digital asset; institutions must manage, monetise and protect it like capital to support growth”.

Can organisations truly own IP addresses?

Importantly, IP address holders typically do not “own” the addresses in a property-law sense. Instead, rights are conferred through regional Internet registries (RIRs) under policy frameworks. Those frameworks determine how addresses are allocated and transferred, and address holders must comply with rules established by community-led governance processes.

This distinction matters: while markets exist where IPv4 blocks are traded or monetised, the underlying rights are mediated by administrative policy rather than straightforward fee-simple ownership. This makes the asset classification for accounting and legal purposes more complex than simply treating IPv4 like a physical commodity.

How organisations benefit from treating IP as digital capital

When unused IPv4 space is identified and assessed properly, it can become a strategic resource. Enterprises may view excess addresses as potential revenue streams by selling or leasing them on secondary markets, helping to unlock value that might otherwise be dormant.

Treating IP address holdings as part of a broader asset management strategy can also support future planning. It can influence decisions about network expansions, mergers and acquisitions, and long-term infrastructure investment.

Why IP addresses can be a liability

However, there are clear liability elements to consider.

Reputation risk

The history of how an IP block was used can significantly affect its usefulness and value. Blocks previously associated with spam, phishing or other malicious activity can carry poor reputational scores, causing email delivery issues and increased security scrutiny.

Operational and governance risk

Transferring or legitimising IPv4 space often requires navigating RIR policies and compliance requirements, which can vary between regions. That may introduce uncertainty and administrative overhead for organisations.

Some governance frameworks emphasise responsible stewardship of address space over purely commercial considerations, which further complicates straightforward monetisation.

How lisps, security incidents and policy disputes complicate liabilities

Security researchers have highlighted systemic management vulnerabilities, noting that poor resource governance can leave IP address space open to misuse or hijacking. While not every network operator will encounter such scenarios, they highlight an inherent risk in treating IP holdings as purely positive assets.

larus.foundation perspective on IP address stewardship

Organisations like the LARUS Foundation provide educational resources on internet governance and address allocation. Their content emphasises that effective IP address management supports network stability and equitable access, which are essential for resilient digital infrastructure.

Although this perspective stops short of advising on financial valuation, it underscores that good practice in IP resource stewardship matters as much as economic considerations.

Asset vs liability: a practical framework

Whether an IP address is an asset or a liability depends on context:

When it behaves as an asset:

• There is strong market demand and pricing for IPv4.

• Organisations can monetise surplus address space.

• Holdings are clean and well-managed.

When it behaves as a liability:

• Past misuse taints reputation scores.

• Transfer and compliance burdens outweigh benefits.

• Security or governance complexities introduce risk.

In practice, many network operators treat IPv4 blocks as digital assets to be managed strategically, while also maintaining robust operational risk controls.

FAQs

1. Are IPv4 addresses legally owned like physical property? 

No. Address space is allocated and registered under RIR policies rather than owned in a conventional property sense.

2. Why do IPv4 addresses have market value? 

Scarcity and ongoing demand for IPv4 create a supply-demand imbalance that buyers and sellers monetise.

3. Can poor reputational history make an IP block a liability? 

Yes. Blocks with histories of abuse can face operational issues that harm deliverability and cause additional costs.

4. How do organisations monetise IP addresses? 

They sell or lease surplus IPv4 blocks through secondary marketplaces where demand exists.

5. Does IPv6 eliminate the need to value IPv4? 

Not yet. IPv6 adoption continues, but IPv4 remains widely used, and markets are still active.