The scarcity of available IPv4 addresses has led to the emergence of a dynamic marketplace where organizations and individuals buy and sell IPv4 address blocks. One of the avenues for acquiring IPv4 addresses is through auctions.

What is an IPv4 Auction?

An IPv4 auction is a marketplace or platform where individuals, organizations, and businesses can buy and sell IPv4 address blocks through a competitive bidding process. In these auctions, sellers typically list the IPv4 address blocks they wish to sell, specifying details such as the block size and any other information about the sale. Then, buyers participate in the auction by placing bids on the listed address blocks over a short timeframe.

The highest bidder at the end of the auction secures the right to purchase the IPv4 addresses, while unsuccessful bidders do not acquire the addresses and may need to explore other acquisition methods.  The actual transfer of the IPv4 addresses must still go through the policy-governed process laid out by the various RIRs.  IPv4 auctions provide a competitive environment and can be a means for businesses to obtain the addresses they need to support their network infrastructure and growth.

The Pros of Participating in IPv4 Address Auctions:

  • Access to IPv4 Resources

Perhaps the most significant advantage of IPv4 address auctions is the opportunity to secure IPv4 address blocks in a competitive market. This is especially valuable for businesses that require additional IPv4 resources to support their growth or transition to IPv6, and that have the flexibility to participate in an auction environment.

  • Ability to View Prices Online

Auction sites allow Buyers to browse through various IPv4 offers to get a quick ballpark on current asking prices. Outliers can be disregarded and average asking prices can be used to shop for IPv4 ranges, even if the Buyer doesn’t ultimately procure their addresses through the auction process.

  • Pricing Flexibility

Auctions allow buyers to determine the value of IPv4 addresses based on their specific budget. Buyers can choose to bid only up to the amount they are willing to pay, helping control costs.

  • Diverse Range of Addresses

Auctions often feature a diverse range of IPv4 address blocks, allowing buyers to find addresses that best suit their requirements in terms of size and geographic location.

The Cons of Participating in IPv4 Address Auctions:

  • Competitive Bidding

While competition can be an advantage, it can also drive up prices. In highly competitive auctions, the winning bid can exceed the anticipated market value of the IPv4 addresses.

  • Lack of Transparency

While most auction sites allow buyers to know the specific IPv4 block range in advance of bidding, this only allows even sophisticated buyers to check for obvious current blacklist entries on the range.

More in-depth information, such as the routing and geolocation history of the range, whether it was used for email or proxy services in the past, and so forth, are much harder to determine without the benefit of using a full service IPv4 broker that has experience in researching historical IPv4 activity and has direct access to information from the Seller.

Likewise, sellers in an IPv4 auction have little or no ability to vet potential buyers, who may be inexperienced in RIR transfers and unable to meet the requirements to successfully receive the IPv4 range.

  • Additional Costs

Participating in an IPv4 address auction usually involves additional costs, such as auction platform fees, legal fees, and the cost of due diligence to ensure the legitimacy of the address block being sold.  Broker fees, particularly the ones charged to sellers, tend to be higher than average since the fees have to support the operational and legal expenses of the auction site itself.

Most prices listed on IPv4 auction platforms are significantly higher than a seller can expect to receive, due to these higher fees.

  • Limited Participation Levels

Auctions are all about timing.  If a buyer is shopping for a particular IPv4 block that happens to be available in an auction time window that suits them, this can result in a successful sale.  More often than not, however, sellers would be better off waiting until a suitable buyer comes along than trying to fit the sale process into a tight timeframe.

Sellers should be aware that many of the most active IPv4 buyers in the world do not participate in auctions, either due to the risks noted above or because their internal procurement process requires signed contracts and purchase orders with specific pricing.

IPv4 Address Auction Summary

IPv4 address auctions offer both advantages and challenges for those seeking to acquire IP addresses. While they provide a platform for acquisition and a diverse selection of addresses, the competitive nature of auctions and high fees can lead to higher prices and a degree of unpredictability.

Before participating in an IPv4 address auction, it is crucial for buyers to conduct proper research, define their budget, and assess their specific needs. Seeking expert advice from IP brokers can help organizations navigate the auction process more effectively.

In the end, the decision to participate in IPv4 address auctions should be made with a clear understanding of the potential benefits and drawbacks, ensuring that your IPv4 address acquisition aligns with your long-term network and business goals. If you have questions or want to learn more information about IPv4 auctions, contact IPTrading today!