Sun, 11 Nov 2007

No IPv4 Address Exhaustion

In a previous posting about IPv6 economic nonsense, I attacked nonsense as nonsense. But actually, the economics of the article are worse than that. At the end of Iljitsch's article on IPv4 Address Consumption, he suggests creating an anti-market. In order to create a predictable destruction of the IPv4 Internet (which he hopes will be supplanted by the IPv6 Internet), he suggests that address trading should be artificially limited. The purpose of this is to create IPv4 pain so that IPv6 will be seen as less painful.

Economists are shaking their heads at this point. "Use a market!" they cry, "Markets are great at allocating scarce goods!". The problem with Iljitsch's suggestion is that it creates pain everywhere. Not everyone will be ready to switch to an IPv6 Internet at the same time. There will need to be a transition period, where some people will need IPv4 addresses, and some can use IPv6 addresses. How to decide who gets and who goes without? You could do some kind of "desperation" metric, where the people who need them more badly get them, and those who don't, don't.

The problem with trying to centrally control the allocation of IP addresses is that the information necessary to do so is not available centrally. And even if it can be gathered centrally, there is no reason to believe that the metric will allocate the addresses according to the wishes of the authors of the metric. And there is no reason to believe that their wishes correspond to the interests of society at large.

An anti-market throws sand into the gears. If there was, instead, a market for IPv4 addresses, then anyone willing to pay the going price could get an address. At some point, the disadvantages of an IPv6 address in an IPv4 world would be overcome by the price of an IPv4 address. At what point? Nobody can say. The information necessary to predict an end to the IPv4 Internet is inside people's heads. The only way to get it out is to create a market and let individuals decide for themselves.

You see, we will never run out of IPv4 addresses. If there's a market, there will always be somebody willing to sell for some price. We will know that we have achieved an IPv6 Internet when the price of an IPv4 address drops back to zero. The way to get there from here is not to artificially create a scarcity of IPv4 addresses. Because, after all, that is the problem, right? How do you make a problem better by making it worse? Shades of medieval doctors' bleeding of patients! Shades of the Vietnam era "We had to destroy the village to save it"! We laugh at these ideas now -- so save time and laugh at Iljitsch's idea -- quickly, before somebody takes him seriously and implements it!

UPDATE: IPv4 routing needs to be part of what gets traded in the market.

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