IP address
An IP address serves two principal functions. It identifies the host, or more specifically its network interface, and it provides the location of the host in the network, and thus the capability of establishing a path to that host. Its role has been characterized as follows: "A name indicates what we seek. An address indicates where it is. A route indicates how to get there."
The header of each IP packet contains the IP address of the sending host, and that of the destination host.
Classful network
In the original address definition, the most significant eight bits of the 32-bit IPv4 address was the "network number" field which specified the particular network a host was attached to. The remaining 24 bits specified the local address, also called "rest field" (the rest of the address), which uniquely identified a host connected to that network. This format was sufficient at a time when only a few large networks existed, such as the ARPANET (network number 10), and before the wide proliferation of local area networks (LANs). As a consequence of this architecture, the address space supported only a low number (254) of independent networks.