The address "127.0.0.1" is known as the loopback address in computer networking. It is used to establish a connection to the same device that is making the request. This means that when a user or application sends data to this address, it is sent back to the same machine, allowing for testing and troubleshooting without needing an external network. This address is part of the larger IPv4 addressing scheme, which consists of four sets of numbers separated by periods. The loopback address is commonly used by developers to test applications locally before deploying them on a live server.