Classless Inter-Domain Routing
An IP address is interpreted as composed of two parts: a network-identifying prefix followed by a host identifier within that network. In the previous classful network architecture, IP address allocations were based on the bit boundaries of the four octets of an IP address. An address was considered to be the combination of an 8, 16, or 24-bit network prefix along with a 24, 16, or 8-bit host identifier respectively. Thus, the smallest allocation and routing block contained only 256 addresses—too small for most enterprises, and the next larger block contained addresses—too large to be used efficiently even by large organizations. This led to inefficiencies in address use as well as inefficiencies in routing, because it required a large number of allocated class-C networks with individual route announcements, being geographically dispersed with little opportunity for route aggregation.
IPv6 address
A 64-bit interface identifier is most commonly derived from its 48-bit MAC address. A MAC address is turned into a 64-bit EUI-64 by inserting in the middle: . When this EUI-64 is used to form an IPv6 address it is modified: the meaning of the "Universal/Local" bit (the 7th most significant bit of the EUI-64, starting from 1) is inverted, so that a 1 now means "Universal". To create an IPv6 address with the network prefix it yields the address (with the "Universal/Local" bit, the second-least-significant bit of the underlined quartet, inverted to 1 in this case because the MAC address is universally unique).