There are certain addresses that cannot be assigned to hosts. There are also special addresses that can be assigned to hosts, but with restrictions on how those hosts can interact within the network.
Network and Broadcast Addresses
As explained earlier, within each network the first and last addresses cannot be assigned to hosts. These are the network address and the broadcast address, respectively.
Loopback
One such reserved address is the IPv4 loopback address 127.0.0.1. The loopback is a special address that hosts use to direct traffic to themselves. The loopback address creates a shortcut method for TCP/IP applications and services that run on the same device to communicate with one another. By using the loopback address instead of the assigned IPv4 host address, two services on the same host can bypass the lower layers of the TCP/IP stack. You can also ping the loopback address to test the configuration of TCP/IP on the local host.
Although only the single 127.0.0.1 address is used, addresses 127.0.0.0 to 127.255.255.255 are reserved. Any address within this block will loop back to the local host. No address within this block should ever appear on any network.
Link-Local Addresses
IPv4 addresses in the address block 169.254.0.0 to 169.254.255.255 (169.254.0.0/16) are designated as link-local addresses. These addresses can be automatically assigned to the local host by the operating system in environments where no IP configuration is available. These might be used in a small peer-to-peer network or for a host that could not automatically obtain an address from a DHCP server.
Communication using IPv4 link-local addresses is only suitable for communication with other devices connected to the same network, as shown in the figure. A host must not send a packet with an IPv4 link-local destination address to any router for forwarding and should set the IPv4 time to live (TTL) for these packets to 1.
Link-local addresses do not provide services outside of the local network. However, many client/server and peer-to-peer applications will work properly with IPv4 link-local addresses.
TEST-NET Addresses
The address block 192.0.2.0 to 192.0.2.255 (192.0.2.0/24) is set aside for teaching and learning purposes. These addresses can be used in documentation and network examples. Unlike the experimental addresses, network devices will accept these addresses in their configurations. You may often find these addresses used with the domain names example.com or example.net in RFCs, vendor, and protocol documentation. Addresses within this block should not appear on the Internet.
Experimental Addresses
The addresses in the block 240.0.0.0 to 255.255.255.254 are listed as reserved for future use (RFC 3330). Currently, these addresses can only be used for research or experimentation purposes, but cannot be used in an IPv4 network. Though, according to RFC 3330, they could, technically, be converted to usable addresses in the future.