Securitizing IP Addresses: Is it time to become an IPv4 Investor?

title.webp

For decades, the IP address market operated in the shadows, largely unnoticed by the mainstream. However, the shortage of IPv4 addresses and their growing importance are changing that narrative. The recent information from Cogent Communications on securitizing IPv4 addresses for financial collateral has opened new horizons for businesses and investors [1].

Unlike traditional investment assets, IP addresses have a steadily growing market price, making them a reliable store of value. Unlike real estate, cryptocurrencies, or documents, IP addresses are less vulnerable to external factors. This resilience makes IP addresses highly attractive for securitization.

The Appeal of IPv4 Securitization

Securitized instruments based on IPv4 addresses create new opportunities for investors and companies, offering a new class of defensive assets with surprisingly good potential returns. Here are the key advantages:

  • Portfolio Diversification: IPv4 addresses introduce a novel asset class, reducing dependency on traditional investments.
  • Tax Efficiency: These assets provide improved tax advantages for certain types of investors.
  • Stability: The growing demand for IPv4 addresses ensures their long-term value, making them a secure investment.

Platforms and Services for IPv4 Asset Management

The emergence of securitized instruments underscores the importance of regulating the IP address market. This not only boosts the value of these assets but also encourages the development of platforms and services to manage and trade them. Companies like InterLir GmbH help organizations acquire and monetize IP addresses, offering leasing options that generate steady income in addition to the rising asset value.

A New Frontier in Finance

The securitization of IPv4 addresses represents an exciting new frontier in finance. Cogent Communications’ initiative highlights the potential of IP addresses as valuable assets. As the field evolves, new financial instruments and practices may emerge, fundamentally changing how we perceive and manage investments.

For example, Microsoft’s acquisition of IPv4 addresses [3] formalized the market. Similarly, the deal mentioned at the beginning of this article could transform IPv4 addresses into securities regulated by organizations like the SEC in the US. Trading platforms for these assets may soon become exchanges, subject to financial regulations.

Conclusion

The scarcity and increasing value of IPv4 addresses present a unique opportunity for investors. The securitization of these assets provides access to a new class of investments, with advantages like tax efficiency, stability, and portfolio diversification. As regulations and trading platforms develop, IPv4 addresses are poised to become a cornerstone of modern financial instruments.

With companies like Cogent Communications and InterLir GmbH paving the way, the evolution of IPv4 securitization could reshape the financial landscape, offering unprecedented opportunities for businesses and investors alike.

By Alexey Shkittin, Visionary & Founder

References:

[1] - Cogent Announces IPv4 Address Securitization Offering
[2] - InterLir GmbH
[3] - Microsoft Acquires Nortel’s IPv4 Addresses for $7.5 Million