IP addressing is a system used to identify devices on a network. Each device connected to the internet or a local network is assigned a unique IP address, which acts like a home address for data packets. This address allows devices to communicate with each other, ensuring that information sent from one device reaches the correct destination. There are two main types of IP addresses: IPv4 and IPv6. IPv4 addresses are composed of four sets of numbers separated by periods, while IPv6 addresses use a longer format with hexadecimal numbers separated by colons. The transition to IPv6 was necessary due to the limited number of IPv4 addresses available.