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.
IP multicast
IPv4 multicast packets are delivered using the Ethernet MAC address range 01:00:5e:00:00:00–01:00:5e:7f:ff:ff (with an OUI owned by the IANA). This range has 23 bits of available address space. The first octet (01) includes the broadcast/multicast bit. The lower 23 bits of the 28-bit multicast IP address are mapped into the 23 bits of available Ethernet address space. This means that there is ambiguity in delivering packets. If two hosts on the same subnet each subscribe to a different multicast group whose address differs only in the first 5 bits, Ethernet packets for both multicast groups will be delivered to both hosts, requiring the network software in the hosts to discard the unrequired packets.