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Cypherpunk Holdings Inc. (CSE: HODL/OTC: KHRIF), the sector leader for cryptocurrency, privacy and cryptography focused investments, has acquired an additional 8,192 IP version 4 (IPv4) addresses.

As a result, Cypherpunk now holds a total inventory of 24,576 IPv4 addresses, of which 16,384 are currently being leased to third parties through existing contractual arrangements. Cypherpunk says it has also entered into an agreement to lease its recently acquired IPv4 addresses to customers on similar terms.

IPv4 is the fourth version of the Internet Protocol (IP). It uses a 32 bit address space which provides over 4bn possible unique addresses. It remains the Internet’s principal set of rules for communications and has been in use for over 35 years. However, there is now intense pressure on the remaining available library of IPv4 addresses as there is a finite supply, and rising demand.

Average household uses five IP addresses

The median developed world household has five devices using unique IP addresses. Plans afoot for the Internet of Things (IoT) are going to require much, much more. In 2011 the Internet Assigned Numbers Authority which coordinated IP addresses, ran out of free IPv4 address space. It sought to recover unused addresses which went into a recovered address pool in 2014. But this remains a finite pool of addresses. Once they’re gone, they’re gone.

While there is plenty of talk about transitioning to IPv6, a 128 bit successor protocol, that has not happened and is known to be fraught with difficulty. While some developers say it is just around the corner, we note there was fighting talk about the imminent deployment of IPv6 in 2011 when the original IPv4 free pool was exhausted. Yes, that was a decade ago. Any claims that this could happen overnight should be treated with caution.

IPv6 still facing many problems

There are currently still many issues surrounding IPv6. First off, much of the current hardware in use by homes and businesses, including routers, cannot interact with IPv6. Manufacturers are behind the curve on this one. According to Oracle, servers are also having difficulty running both addresses at the same time. Many ISPs still do not support IPv6. Businesses are also concerned about ongoing security issues around relay routers which operate between the two.

This all means that the world is facing a severe shortage of IPv4 addresses, right at the time when many companies are making bullish pronouncements about IoT. Having a pool of IPv4 addresses you can lease out suddenly looks like a great income generating play.

Tony Guoga, Cypherpunk’s Chief Executive Officer, said: “Cypherpunk is focused on a privacy technology thesis. As people wake up to the issues surrounding digital privacy, undervalued assets such as IPv4 can be expected to increase in value. This is why the company continues to invest in scarce digital assets such as IPv4 addresses and why we believe that our acquisition of additional IPv4 addresses will yield a healthy return.”

Cypherpunk was established to invest in currencies, companies, technologies and protocols, which enhance or protect privacy. Its strategy is to make targeted investments in businesses and assets with strong privacy attributes, often within the blockchain ecosystem, including select cryptocurrencies. Current equity investments include Bitcoin, Ethereum, Samourai Wallet, Wasabi Wallet, Chia and NGRAVE.

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Please note this article does not constitute investment advice. Investors are encouraged to do their own research beforehand or consult a professional advisor.

Stuart Fieldhouse

Stuart Fieldhouse

Stuart Fieldhouse has spent 25 years in journalism and marketing, including as a wealth management editor for the Financial Times group, covering capital markets and international private banking, and as an investment banking correspondent for Euromoney in Hong Kong. He was the founder editor of The Hedge Fund Journal.

Stuart has worked at CMC Markets, supporting the re-launch of its global financial spread betting and CFD trading platforms. He is also the author of two books on trading, published by Financial Times Pearson. Based in The Armchair Trader’s London office, Stuart continues to advise fund managers, private banks, family offices and other financial institutions.

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