Consider a tiny (5 machine) piece of the internet. Three hubs, an outlink and two smaller hubs, all connected (a triangle). With 4 bits, the left hub can have a

Consider a tiny (5 machine) piece of the internet. Three hubs, an outlink and two smaller hubs, all connected (a triangle). With 4 bits, the left hub can have all the 0xxx addresses and the right hub can have all the 1xxx addresses. No matter where the devices connect, they can all get an IP and the outlink only needs to remember a simple rule (starts with one, go right, else go left). Compare to a 3 bit network. By moving IPs from hub to hub, all five devices can always get an address, but the small hubs need to communicate which addresses they own to the outlink and to each other in order to avoid address exhaustion on either hub. Routing a packet is slower because the routing is more complex.