IP Addresses
IP addresses allow different computers and devices to communicate with each other, similar to how phone numbers allow people to communicate. Every computer or device that is connected to the Internet is assigned a unique IP address. The allocation of IP addresses is overseen by the Internet Assigned Number Authority (IANA). IANA allocates large blocks of IP addresses to the following five Regional Internet Registries (RIRs) that serve specific areas around the world: AfriNIC (Africa), APNIC (Asia/Pacific), ARIN (North America), LACNIC (Latin America), and RIPE NCC (Europe, the Middle East, and Central Asia). The RIRs then allocate smaller blocks of IP addresses to Internet Service Providers (ISPs) who then sub-allocate to businesses, organizations, and consumers.

IP Address Location
IP address location, also known as geolocation, is the process of identifying the geographical location of an IP address or end user location of that IP address. What can IP location be used for? Knowing the location of end users enables online businesses and organizations to localize content, deliver geo-targeted ads, perform site traffic analysis, manage digital rights, ensure regulatory compliance, detect fraud, and more. While there are no official centralized sources of IP location data, different companies have similar and different ways of resolving an IP address to a geographical location. However, IP location is not an exact science and most likely will never be 100% accurate due to current allocation and delivery methods employed by IANA, RIRs, and ISPs.

Registry databases maintained by the RIRs, also known as whois data, is the closest thing to an official centralized source of IP location data. The whois data shows who the IP addresses have been assigned to. Using the registration data, one can compile a fairly accurate IP location database for identifying the location of IP addresses on the country level. MaxMind's free GeoLite Country database is compiled using data obtained from the RIRs. However, IP address location becomes fairly inaccurate beyond the country level as discussed below.

The RIRs generally only assign IP blocks to ISPs and large organizations while sub-allocations can be obtained from an ISP. As a result, the registry data for IP addresses used by individual consumers and small businesses will reflect those of their ISP. For these IP addresses, the whois data will reflect the office address used by the ISP when registering for those blocks of IPs instead of those of end users. Additionally, if an ISP services a large area, in some cases even multiple countries, resolving an IP location down to the country level will also be difficult. For example, AOL is a large ISP that provides service to consumers in many different countries, but whois lookups for IP addresses allocated to AOL will all point back to the same office address used by AOL during registration. The same scenario will happen for ISPs that provide Internet access to users of different countries using satellites. Additionally, registry data are not always kept up to date or may contain false registration information as well which further decreases IP location accuracy.

IP Address Location with GeoIP
GeoIP is the trademark for the IP address location databases developed by MaxMind. There are many different ways to derive estimated IP location data, including using user entered information. MaxMind partners with various websites where users are asked to enter some form of geographical location information. The IP address and location data are forwarded to MaxMind after all personally identifiable information have been scrubbed to protect privacy concerns. MaxMind then runs millions of these IP location pairs through a series of algorithms and programs that identify, extract, and extrapolate relevant associations between IP address and geographical information. IP addresses that are more difficult to resolve are manually reviewed. GeoIP IP location is a fairly simple idea but the process of extracting IP location information accurately is complex. Much of the difficulty behind extracting IP location correctly is the need for a deep understanding the unique ways that IP addresses are sub-allocated, used, and routed by the thousands of ISPs around the world.

Benefits of GeoIP/User Entered Information
There are many benefits of using user entered information as a component of the algorithms to generate the IP location data. Since the idea of IP location is to determine the geographical location of end users, the best place to obtain that information would be directly from the end user. The greatest advantage of user entered information is being able to determine the actual usage of IP addresses. Other methods may determine where servers or machines are located, but may not be able to determine the actual usage of IP addresses. For example, take an IP address that has been allocated to XYZ corporation based in the US. XYZ corporation decided to use this IP address for a proxy server located in the UK that serves XYZ's various European offices located in different countries. A whois lookup may suggest that the IP address location is within the US since XYZ's headquarters may be listed on the registration data. Other methods such as traceroute or ping-tracing may be able to triangulate the physical server location to the UK but would inaccurately represent the IP location of the actual end users. With user entered information, MaxMind can determine the the locations of end users and more accurately determine IP address locations. In the scenario with XYZ Corporation, since the IP address is being used as a corporate proxy servers users all over Europe, it is better to mark the IP address location as "Europe" instead of the actual location of the proxy, in order to prevent false positives.