What Is An IP Address?

Every machine on a network has a unique identifier. Just as you would address a letter to send in the mail, computers use the unique identifier to send data to specific computers on a network.

Most networks today, including all computers on the Internet, use the TCP/IP protocol as the standard for how to communicate on the network. In the TCP/IP protocol, the unique identifier for a computer is called its IP address.

There are two IP addressing standards in use today, IPv4 and IPv6.

IPv4 Address

The IPv4 address uses 32 binary bits to create a single unique address on a network. An IPv4 address is expressed by 4 numbers separated by dots. Each number is the decimal (base-10) representation for an eight-digit binary (base-2) number, also called an octet. For example 217.116.25.68

There are about 4.3 billion IP addresses available in the IPv4 address space, these have been virtually exhausted due to the rapid growth of the internet since the 1980s.
The solution for the IPv4 exhaustion is IPv6.

IPv6 Address

The IPv6 address uses 128 binary bits to create a single unique address on a network. An IPv6 address is expressed by 8 groups of hexadecimal (base-16) digits, seperated by colons. For example 2001:CDBA:0000:0000:2331:AB60:FFAB:23E4

There are about 340,282,366,920,938,463,463,374,607,431,768,211,456 addresses available in the IPv6 address space, far far more than available in the current IPv4 address space.
The number is so big, if you could imagine every grian of sand on the earth, you could assign an IPv6 address to each grain and still have addresses left over.