Why NAT was Created?

NAT was created because IPv4 doesn’t have enough IP addresses for everyone.
That’s the short answer to the question: why was NAT created? But let’s explore together the full story behind it.

As you may know, IPv4 uses a 32-bit format, which gives us:

2^32 bits = 4,294,967,296 unique IPv4 addresses

At first, it seemed like more than enough. Over 4 billion IP addresses felt like a massive pool for IP device.

IPv4 Was Never Designed for the Modern Internet

Back then, the internet was small. But as more people and devices came online, we quickly realized IPv4 couldn't scale. Every device connected to the internet needs an IP, and suddenly, that huge number wasn’t enough anymore.

NAT was developed as a short-term solution to prolong the life of IPv4

To understand why NAT became necessary, let’s go back in time.

Looking back at the early days of the internet, the institutions responsible for managing IPv4 addresses started assigning very large IP blocks to organizations like HP, Ford, and even universities like MIT.

These blocks were massive we’re talking about /8 subnet, which means each organization received over 16 million public IP addresses, whether they needed them or not.

Figure 1 – In the 1990s, IANA gave huge public IP ranges (/8) to organizations, wasting millions of addresses

At the time, this didn’t seem like a problem.
But in the 1990s, the internet began to explode in popularity, more users, more networks, and more connected devices.

The IANA, which was in charge of assigning IP addresses globally, quickly became overwhelmed...
The allocation model was inefficient, and a huge number of addresses remained unused, just sitting idle in these large allocations.

In 2019, all public IPv4 addresses were officially exhausted.
No more new IPv4 adresses could be assigned.

As this crisis became clear, engineers started looking for solutions to keep IPv4 usable despite the shortage.

One of the most effective solutions to this problem turned out to be NAT (Network Address Translation).

Before NAT was introduced, network engineers tried another approach…

IPv6: The New IP Address

One of the earliest ideas was to design an entirely new version of the IP protocol.
That’s how IPv6 came into existence.

Figure 2 – IPv6 was created to replace IPv4 by expanding addresses from 32 to 128 bits

While IPv4 uses a 32-bit address format, IPv6 expanded this to 128 bits.

That means:

2^128 bits = 340 undecillion possible addresses

It’s an astronomical number, more than enough to give every device on Earth a unique IP address… and still have plenty left.

On paper, IPv6 looked like the perfect solution.
But as often happens, theory didn’t match reality.

IPv4 Was Too Valuable to Abandon

By the time IPv6 was ready, the world was already deeply invested in IPv4.

Migrating to IPv6 would require:

• Replacing incompatible hardware

• Updating legacy software

• Training IT teams

• Redesigning network infrastructure

In short: it was too expensive, too risky, and too disruptive.

Most businesses weren’t ready and still aren’t, decades later.
So engineers reframed the problem:

How can we keep using IPv4… even if we’ve run out of public IP addresses?