Most devices are connected to a smaller network, which in turn is connected to a larger network. For example, businesses often have smaller networks (called subnets) that are part of a larger WAN, and the entire WAN itself may include only one or two Internet servers that provide access to the Internet. A home user is likely to have a single Internet connection with a router that allows multiple devices to share that connection.

In this case, the router or DHCP server assigns dynamic IP addresses to the devices connected to the inner network. A dynamic IP address is an address that is assigned to a device when it connects to the network but that is made available for other devices to use after the original device disconnects from the network.

This means that a specific device may have a different IP address in the network the next time it connects and that a single LAN can potentially have more devices than IP addresses, as long as they aren’t all connected to the network at the same time.

These networks also have the option to assign a static IP address to any device, which can be useful for shared devices such as printers that all users need to be able to find on the network.