How do IP addressing, subnets, CIDR, and NAT work?

Question

IT Interview Practice · Accepted Answer

An **IP address** identifies a host on a network. **IPv4** uses 32 bits, written as four octets (`192.168.1.10`), giving ~4.3 billion addresses — not enough, which drives NAT and IPv6. **IPv6** uses 128 bits (`2001:db8::1`), a practically unlimited space.

**CIDR** notation splits an address into a **network prefix** and a **host** part with a `/n` suffix, where `n` is how many leading bits identify the network:

```text
192.168.1.10 / 24
└──────┬─────┘ └┬┘
   address     prefix length (24 bits = network, 8 bits = host)

/24  →  192.168.1.0   network,  192.168.1.1–254 hosts,  192.168.1.255 broadcast
        (256 addresses, 254 usable)
/16  →  192.168.0.0   larger network (65,536 addresses)
```

A **subnet** is a slice of an address space carved out by the prefix. A shorter prefix (`/16`) means a bigger network with more hosts; a longer prefix (`/28`) means a small subnet. Subnetting lets you segment a network for organization and security — e.g. put databases in a private `/24` separate from web servers.

**NAT** (Network Address Translation) is how many devices share one public IPv4 address. Your home router hands out **private** addresses (ranges like `192.168.x.x`, `10.x.x.x` that aren't routable on the internet) and rewrites the source address/port of outgoing packets to its single public IP, keeping a translation table to route replies back:

```text
Private LAN                     NAT router                 Internet
192.168.1.10:51000  ──▶  translate to  203.0.113.5:40001  ──▶  server
192.168.1.11:51000  ──▶  translate to  203.0.113.5:40002  ──▶  server
        (router's table maps public port → private host:port for the return trip)
```

NAT conserved the scarce IPv4 space (and adds incidental isolation), but it also breaks direct inbound connections — which is why IPv6, with enough addresses for every device, aims to remove the need for it.

## Why it matters

Addressing and subnets are the foundation of cloud networking: every VPC, subnet, security group, and firewall rule is written in CIDR, so you can't design a cloud network without it. Interviewers check that you can read a `/24` and reason about network size and segmentation. NAT explains the everyday reality of private vs public IPs and why "it works outbound but not inbound," and the IPv4-exhaustion story is the *why* behind both NAT and IPv6 — showing you understand the pressures that shaped the modern internet.

Why it matters

Related questions