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Networking Basics & IP Addresses

Updated
24 Sept 2026
1 min read
4 sections
Page 4 of 51
System Design
Adapted from Mastering System Design from Basics to Cracking Interviews (Udemy) — https://www.udemy.com/course/mastering-system-design-from-basics-to-cracking-interviews/

Why Networking Matters in System Design?

Key areas where networking plays a crucial role:

  • Communication: Ensuring smooth data transfer between clients, servers, and databases.
  • Load Balancing: Distributing traffic efficiently to prevent overload on a single server.
  • Security: Protecting data from unauthorized access and cyber threats.
  • Efficiency: Optimizing network performance to reduce latency.

Introduction to IP Addresses

IP (Internet Protocol) addresses are unique numerical labels assigned to devices on a network. They enable communication across the internet.

IPv4 vs IPv6

  • IPv4: 32-bit format (e.g., 192.168.1.1). Limited to ~4.3 billion addresses.
  • IPv6: Designed for IoT, mobile networks, and future scalability (340 undecillion addresses).
IPv4 vs IPv6 FormatsOpen full size ↗

An example IPv4 address (32-bit) shown beside a much longer IPv6 address (128-bit).


Private vs. Public IPs

  • Public IPs: Assigned by ISPs, used to communicate over the global internet. Unique worldwide.
  • Private IPs: Used within local networks (LANs). Cannot be accessed directly from the internet.

Why Do We Need Private IPs?

  1. Conserve Public IPs: Allows millions of devices to share a few public IPs.
  2. Security: Private IPs are not routable over the internet.
  3. NAT (Network Address Translation): Enables multiple devices in a private network to share a single public IP.
NAT Request FlowOpen full size ↗

A NAT router translates a private device's request to a public IP on the way out and maps the response back on the way in.


The Role of IPs in System Design

IP addresses are foundational to building robust architectures:

  • Scalability: Multi-region and cloud-based deployments.
  • Anycast IPs: Directing users to the nearest healthy server.
  • VPC Networking: Isolating microservices using internal private IPs.
VPC Network EntryOpen full size ↗

Traffic from the public internet enters a Virtual Private Cloud holding Service A and Service B through an internet gateway.