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.
Zero-configuration networking
Both IPv4 and IPv6 hosts may randomly generate the host-specific part of an autoconfigured address. IPv6 hosts generally combine a prefix of up to 64 bits with a 64-bit EUI-64 derived from the factory-assigned 48-bit IEEE MAC address. The MAC address has the advantage of being globally unique, a basic property of the EUI-64. The IPv6 protocol stack also includes duplicate address detection to avoid conflicts with other hosts. In IPv4, the method is called "link-local address autoconfiguration". However, Microsoft refers to this as "Automatic Private IP Addressing" (APIPA) or "Internet Protocol Automatic Configuration" (IPAC). The feature is supported in Windows since at least Windows 98.