IP is short for Internet Protocol but is a misnomer for it was named before the advent of the Internet as we know it and is actually short for internet-working protocol. IP is the most common protocol used today in computer networks. IP is a protocol, which is a standard based language that computers use to communicate with one another on a network. In Local Area Networks (LANS) IP is not actually required unless the LAN is segmented using different subnets connected via a router. Where IP is required is when interconnecting those subnets or networks hence the name internet-work protocol.
Routers run IP protocol to build their routing tables, which are populated with the addresses to all known networks that they have heard about through swapping routing updates from peer IP routers. IP routing is based upon the information contained in these IP routing tables. However, IP is not just a way to build source destination maps it is an encapsulation mechanism that takes an Ethernet frame containing data (or voice packets), and attaches an IP header, containing a source and destination IP address amongst other information. The router can inspect each packets destination address and then look up its routing table to find the best route to the destination. It then forwards the packet out the best interface.
IP uses an IP address mechanism to identify networks and hosts (end computers). The address is 32 bits split into four binary octets, which can then be reserved for network or hosts. As this is a very simple process IP has become the most popular routing protocol for interconnecting Ethernet networks, which in turn have become dominant in computer networks as the media encapsulation protocol of choice. VoIP uses IP as a cheap and ubiquitous carrier to forwards voice packets across interconnecting networks.
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