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Due to the tremendous growth of the Internet, scalability issues arose. These problems arose from using address classes when assigning IP addresses to networks that needed to be connected to the Internet.

Class-based IP addressing was subject to three major limitations:

  • The number of available addresses in the class B address space was nearly exhausted.
  • The Internet routing tables were nearly full.
  • In the foreseeable future, all available IP addresses would be assigned.

Exhaustion of class B addresses

The disparate network sizes offered by class-based addressing led to the exhaustion of Class B addresses. In this system, an organization with a medium-sized network of 2,000 computers is in the Class B category. It is assigned 65,534 IP addresses even though it may only need 2,000. Because of this assignment, 63,534 IP addresses are not used.

Populating Internet routing tables

To get around the problem of unused IP addresses, an organization with a medium-sized network of 2,000 computers can divide its network into eight smaller Class C networks of 254 computers each.

This solution results in the creation of eight routes or paths to the organization's eight smaller networks. As a result, each router on the Internet must manage eight routes to forward a packet to this one organization, which increases the amount of information in the Internet routing tables.

Exhaustion of all IPv4 addresses

Due to the waste of addresses in the class-based method and the limited number of available IP addresses, the entire supply of IP addresses would already be exhausted if the class-based method were still used.