Internet addresses are 32-bit numbers, normally written as 4 octets (in decimal), e.g. 128.6.4.7.
There are actually 3 different types of address. The problem is that the address has to indicate both the network and the host within the network. It was felt that eventually there would be lots of networks. Many of them would be small, but probably 24 bits would be needed to represent all the IP networks. It was also felt that some very big networks might need 24 bits to represent all of their hosts. This would seem to lead to 48 bit addresses.
But the designers really wanted to use 32 bit addresses. So they adopted a kludge. The assumption is that most of the networks will be small. So they set up three different ranges of address. Addresses beginning with 1 to 126 use only the first octet for the network number. The other three octets are available for the host number. Thus 24 bits are available for hosts. These numbers are used for large networks. But there can only be 126 of these very big networks. The Arpanet is one, and there are a few large commercial networks. But few normal organizations get one of these "class A" addresses.
For normal large organizations, "class B" addresses are used. Class B addresses use the first two octets for the network number. Thus network numbers are 128.1 through 191.254. (We avoid 0 and 255, for reasons that we see below. We also avoid addresses beginning with 127, because that is used by some systems for special purposes.) The last two octets are available for host addesses, giving 16 bits of host address. This allows for 64516 computers, which should be enough for most organizations. (It is possible to get more than one class B address, if you run out.)
Finally, class C addresses use three octets, in the range 192.1.1 to 223.254.254. These allow only 254 hosts on each network, but there can be lots of these networks. Addresses above 223 are reserved for future use, as class D and E (which are currently not defined).
Many large organizations find it convenient to divide their network number into "subnets".
For example, Rutgers has been assigned a class B address, 128.6. We find it convenient to use the third octet of the address to indicate which Ethernet a host is on.
This division has no significance outside of Rutgers. A computer at another institution would treat all datagrams addressed to 128.6 the same way. They would not look at the third octet of the address. Thus computers outside Rutgers would not have different routes for 128.6.4 or 128.6.5. But inside Rutgers, we treat 128.6.4 and 128.6.5 as separate networks.
In effect, gateways inside Rutgers have separate entries for each Rutgers subnet, whereas gateways outside Rutgers just have one entry for 128.6.
Note that we could do exactly the same thing by using a separate class C address for each Ethernet. As far as Rutgers is concerned, it would be just as convenient for us to have a number of class C addresses. However using class C addresses would make things inconvenient for the rest of the world. Every institution that wanted to talk to us would have to have a separate entry for each one of our networks. If every institution did this, there would be far too many networks for any reasonable gateway to keep track of. By subdividing a class B network, we hide our internal structure from everyone else, and save them trouble. This subnet strategy requires special provisions in the network software. It is described in RFC 950.
0 and 255 have special meanings. 0 is reserved for machines that don't know their address. In certain circumstances it is possible for a machine not to know the number of the network it is on, or even its own host address. For example, 0.0.0.23 would be a machine that knew it was host number 23, but didn't know on what network.
255 is used for "broadcast". A broadcast is a message that you want every system on the network to see. Broadcasts are used in some situations where you don't know who to talk to. For example, suppose you need to look up a host name and get its Internet address. Sometimes you don't know the address of the nearest name server. In that case, you might send the request as a broadcast. There are also cases where a number of systems are interested in information. It is then less expensive to send a single broadcast than to send datagrams individually to each host that is interested in the information. In order to send a broadcast, you use an address that is made by using your network address, with all ones in the part of the address where the host number goes.
For example, if you are on network 128.6.4, you would use 128.6.4.255 for broadcasts. How this is actually implemented depends upon the medium. It is not possible to send broadcasts on the Arpanet, or on point to point lines. However it is possible on an Ethernet. If you use an Ethernet address with all its bits on (all ones), every machine on the Ethernet is supposed to look at that datagram.
Although the official broadcast address for network 128.6.4 is now 128.6.4.255, there are some other addresses that may be treated as broadcasts by certain implementations.
For convenience, the standard also allows 255.255.255.255 to be used. This refers to all hosts on the local network. It is often simpler to use 255.255.255.255 instead of finding out the network number for the local network and forming a broadcast address such as 128.6.4.255.
In addition, certain older implementations may use 0 instead of 255 to form the broadcast address. Such implementations would use 128.6.4.0 instead of 128.6.4.255 as the broadcast address on network 128.6.4.
Finally, certain older implementations may not understand about subnets. Thus they consider the network number to be 128.6. In that case, they will assume a broadcast address of 128.6.255.255 or 128.6.0.0. Until support for broadcasts is implemented properly, it can be a somewhat dangerous feature to use.
Because 0 and 255 are used for unknown and broadcast addresses, normal hosts should never be given addresses containing 0 or 255. Addresses should never begin with 0, 127, or any number above 223. Addresses violating these rules are sometimes referred to as "Martians", because of rumors that the Central University of Mars is using network 225.