Devices on networks must be uniquely identified so that other devices can find and use their services. Because IPX Addressing was designed to be simple and require little maintenance, it doesn’t rely on protocols to enhance its functionality.
Two kinds of addresses identify hosts on the network: hardware or media access control (MAC) addresses, and software addresses. IPX™ uses the MAC address of the Ethernet or token ring network board to identify the host on the network. Since the MAC and node addresses are the same, there is no further translation required to identify the host. IP addresses are not the same as the MAC address of the network board, so IP addresses must be translated into MAC addresses. Address Resolution Protocol (ARP) translates IP addresses to MAC addresses on IP networks.
Dynamic Host Control Protocol (DHCP) is an Internet protocol that provides dynamic distribution of IP addresses to workstations. DHCP helps network administrators with the task of assigning IP addresses to workstations and lessens the problems associated with a shortage of IP addresses. There is no equivalent to DHCP in IPX networks because of the abundance of IPX addresses and their ability to use the MAC address as the software address.