This document discusses IP addresses and their structure. It covers the following key points in 3 sentences: IP addresses have both a network prefix that identifies a network and a host number that identifies a specific device. Subnetting allows an organization to split the host number portion of an IP address into a subnet number and a smaller host number, creating a three-level address hierarchy. The traditional class-based IP address system had problems with inefficient address allocation and inflexible network sizes that motivated the development of subnetting and Classless Inter-Domain Routing (CIDR).