CIDR - Classless Inter Domain Routing

Classless Inter Domain Routing (CIDR) was invented to keep the Internet from running out of IP Addresses. The IPv4, a 32-bit, addresses have a limit of 4,294,967,296 (232) unique IP addresses. The classful address scheme (Class A, B and C) of allocating IP addresses in 8-bit increments can be very wasteful. With classful addressing scheme, a minimum number of IP addresses allocated to an organization is 256 (Class C). Giving 256 IP addresses to an organization only requiring 15 IP addresses is wasteful. Also, an organization requiring more than 256 IP addresses (let's say 1,000 IP addresses) is assigned a Class B, which allocates 65,536 IP addresses. Similarly, an organization requiring more than 65,636 (65,634 usable IPs) is assigned a Class A network, which allocates 16,777,216 (16.7 Million) IP addresses. This type of address allocation is very wasteful.

With CIDR, a network of IP addresses is allocated in 1-bit increments as opposed to 8-bits in classful network. The use of a CIDR notated address can easily represent classful addresses (Class A = /8, Class B = /16, and Class C = /24). The number next to the slash (i.e. /8) represents the number of bits assigned to the network address. The example shown above can be illustrated with CIDR as follows:

   216.3.128.12, with subnet mask of 255.255.255.128 is written as
   216.3.128.12/25

   Similarly, the 8 customers with the block of 16 IP addresses can be
   written as:

   216.3.128.129/28, 216.3.128.130/28, and etc.

With an introduction of CIDR addressing scheme, IP addresses are more efficiently allocated to ISPs and customers; and hence there is less risk of IP addresses running out anytime soon.