What Is an IP Address?
Every device that is connected to a network is assigned a number. This is the device's IP address. IP stands for 'Internet Protocol'.
Unless you've printed out this post, you are reading it on a smartphone or computer that has a unique identifier. This number has been assigned to it by the modem you're currently connected to, or by your Internet Service Provider.
If you are at home, I recommend trying the following to get a sense of what IP addresses look like and do. Go to your Internet Service Provider's webpage and log in with your username and password. See if you can find your home's modem, and then take a look at what is currently connected to it. A local IP address will look something like this:
192.168.0.56
You might be a little surprised to see just how many devices are currently active and connected. These are (hopefully) not your neighbours surfing on your bandwidth, but instead a list of all your connected laptops, PCs, smartphones, TVs, printers and any number of 'Internet of Things' devices, like Amazon's Alexa. These local IP addresses may all start with identical strings of numbers and end with a unique identifier, like this:
192.168.0.45
192.168.0.122
etc.
There is a difference between these local (i.e. connected to your home Wi-Fi) IP addresses, and the public-facing IP address that your Internet Service Provider has assigned to your home's connection to the whole Internet. You can look this address up by searching 'What is my IP?' in any browser, and it will look something like this:
89.71.221.37
Everyone connected to the Internet in your home via this portal will be seen under the same public IP address. Be aware that these IP addresses are geographically traceable. So if one person in your home makes a silly edit on Wikipedia, then it's possible the entire household will be blocked from making further edits, because Wikipedia will block the public-facing IP address.1
When first setting up new devices in your home, it is helpful to give each device a recognisable name, like 'Bob's laptop'. You're usually offered this option when first installing a new operating system, or when setting up a new smartphone. The names should show up on your modem's IP address list, and this can help give you better a sense of what is actively connected in your home at any given time. Depending on the granularity of your monthly bandwidth report, it may also show you which devices are using up the most data.2
This has been a simple explanation of IP addresses. If you want to find out more, I suggest reading detailed articles like those linked below.
Why is it important?
Judging by some of the behaviours and comments seen online, a lot of people think they are connecting to the Internet anonymously. But by default, when you go on to any website, you are broadcasting your public-facing IP address to that site.
Pseudonymous platforms like Reddit may use your IP address as a central identifier to connect all your interests and interactions to, for profiling and targeted advertising. They have to make a profit somehow. On social media platforms where your real-life identity is a key feature, like Facebook and Instagram, users are connecting a lot of personal information to their IP addresses over time.
IP addresses can be used to get a rough estimate of your geographical location, and of course, the Internet Service Provider you subscribe to knows your IP. These addresses can change, but that doesn't happen as a rule. Your online interactions are tied to your physical home address or your smartphone; both good and bad people can use it to tie online engagements back to you.
What can I do about it?
For starters, I recommend finding and reading your Internet Service Provider's privacy policy. Find out what information they are recording, both on your smartphone and on devices connected to your home modem. I discovered my own ISP mostly does a good job protecting my privacy by default. But I also learned about further steps I had to manually take to opt out of some personal data collection, something which I would have been unaware of had I not read the policy. And there are full disclosure tiers people can voluntarily (or unthinkingly) sign up for where all data, including browser interactions, are recorded and kept for years, with personalised ads as a supposed incentive.
If your ISP or any company offers you 'personalised advertising', always say no. It means you're giving them more permission to start documenting your online behaviour. Who needs personalised ads anyway?
Awareness of local IP addresses may help you decide whether or not to engage in personal online activities on work devices. I try to maintain a complete separation between work and personal use.
Lastly, using a VPN, or 'Virtual Private Network' can help circumnavigate the IP issue. This topic is a little bit complicated, because a lot of services that offer VPNs are actually not privacy-protecting at all, so I'll do a separate post on that soon.
Documentation
Kaspersky "What is an IP Address – Definition and Explanation"
Lifewire "What Is a Public IP Address?"
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This is how I learned that my Monero mining PC was causing forced reductions in bandwidth for our whole household near the end of every month.↩