DHCP assigns dynamic IP addresses to devices on a network. With dynamic addressing, a device can have a different IP address whenever the device connects to the network. In some systems, the device’s IP address can even change while it is still connected. DHCP also supports a mix of static and dynamic IP addresses.

Dynamic addressing simplifies network administration because the software keeps track of IP addresses rather than requiring an administrator to manage the task. This means you can add a new computer to a network without needing to manually assign a unique IP address. Many ISPs use dynamic IP addressing for dial-up users. However, dynamic addressing may not be desirable for a network server.