North American Network Operators Group

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RE: IPV4 as a Commodity for Profit

  • From: michael.dillon
  • Date: Mon Feb 18 13:28:22 2008

> Markets have a history of efficiently allocating resources, this much
is true. 

Its only true when those markets have sufficient liquidity.
We have gotten used to regulated markets where the SEC
and others, make sure that liquidity is maintained and
block trading of instruments when liquidity is insufficient.

In order to be liquid, a market has to have a sufficiently
stable supply. If it is a commodity market, where the
instruments being traded are then consumed by the buyer
in producing their products or services, then the only
way to maintain liquidity is to have a steady supply of
fresh commodities. This is not too hard when talking about
orange juice, pork bellies or even gold. But they are not
making any more IPv4 addresses. The supply is fixed and
the problem which we face is that the global unallocated 
supply is shrinking to the point of exhaustion in about two years.

In this situation, I can't see that it would be possible
to have a liquid IPv4 address market for more than a short
period of time. Since IPv4 trading is not regulated by
the SEC (unless it comes under some umbrella provision) the
way is open for some group of SMART, WELL-EDUCATED INDIVIDUALS
to rig the market and make off with lots of cash when it

Everyone in the network operations sphere is a rank amateur
when it comes to making markets, maintaining liquidity and
regulation of trading. We cannot possibly hope to create 
a market within the next two years which is beneficial to
the Internet network operations industry.

--Michael Dillon