Understanding binary notation is important when determining if two hosts are in the same network. Recall that an IP address is a hierarchical address that is made up of two parts: a network portion and a host portion. But when determining the network portion versus the host portion, it is necessary to look, not at the decimal value, but at the 32-bit stream. Within the 32-bit stream, a portion of the bits makes up the network and a portion of the bits makes up the host.
The bits within the network portion of the address must be identical for all devices that reside in the same network. The bits within the host portion of the address must be unique to identify a specific host within a network. Regardless of whether the decimal numbers between two IPv4 addresses match up, if two hosts have the same bit-pattern in the specified network portion of the 32-bit stream, those two hosts will reside in the same network.
But how do hosts know which portion of the 32-bits is network and which is host? That is the job of the subnet mask.
When an IP host is configured, a subnet mask is assigned along with an IP address. Like the IP address, the subnet mask is 32 bits long. The subnet mask signifies which part of the IP address is network and which part is host.
The subnet mask is compared to the IP address from left to right, bit for bit. The 1s in the subnet mask represent the network portion; the 0s represent the host portion. As shown in Figure 1, the subnet mask is created by placing a binary 1 in each bit position that represents the network portion and placing a binary 0 in each bit position that represents the host portion. Note that the subnet mask does not actually contain the network or host portion of an IPv4 address, it just tells the computer where to look for these portions in a given IPv4 address.
Similar to IPv4 addresses, the subnet mask is represented in dotted decimal format for ease of use. The subnet mask is configured on a host device, in conjunction with the IPv4 address, and is required so the host can determine which network it belongs to. Figure 2 displays the valid subnet masks for an IPv4 octet.