On the latest Security Now, Steve and Leo were again talking about IPv4 address space depletion. And again, they looked at it all the wrong way. Why should everyone move to IPv6? Why should people with Class A addresses give them up? To be a “good internet citizen”. Oh, please.

Why should a business give up something they own, and voluntarily take on the burden of migrating to IPv6, instead of using their Class A addresses? Because, for whatever reason, those Class A addresses become more valuable than the IPv6 transition would cost. The opportunity cost of keeping the addresses has to become higher than the cost of switching.

How do we do that? How do we get cash-strapped universities and businesses to give up addresses? Treat them like the homogeneous, scarce good that they are, and let people who want them buy them on an open market. Stop talk about “responsibility”, and start talking about prices. The price signals will let people know how much they have to pay if they want to stay on IPv4, and the cost will slowly creep up. Eventually, the bottom will fall out, and those IPv4 addresses will be worthless, just like stock in a buggy whip manufacturer.

I’ve only managed to find one serious discussion of this, an Ars Technica article about an “internet stock market”. But it uses market-illiterate scare phrases like “demand outstrips supply”, and “run on the bank”.

Nonsense. The price will rise, and “squatters” will become speculators who have a strong financial incentive to figure out exactly the right price at which to buy and sell, becoming the grease in the wheels of the machine. As long as the government butts out and doesn’t try to regulate the distribution in the name of “fairness”, people and firms will buy and sell address space until everyone has as much as they want at the given price.

Catallaxy. It works, bitches.