Traditionally, each network interface on an IP host or router has its own IP address. This can cause inefficient use of the scarce IP address space, since it forces allocation of an IP network prefix to every point-to-point link.
To solve this problem, a number of people have proposed and implemented the concept of unnumbered point to point lines. An unnumbered point to point line does not have any network prefix associated with it. As a consequence, the network interfaces connected to an unnumbered point to point line do not have IP addresses.
Because the IP architecture has traditionally assumed that all interfaces had IP addresses, these unnumbered interfaces cause some interesting dilemmas. For example, some IP options (e.g., Record Route) specify that a router must insert the interface address into the option, but an unnumbered interface has no IP address. Even more fundamental (as we shall see in chapter 5) is that routes contain the IP address of the next hop router. A router expects that this IP address will be on an IP (sub)net to which the router is connected. That assumption is of course violated if the only connection is an unnumbered point to point line.
To get around these difficulties, two schemes have been conceived. The first scheme says that two routers connected by an unnumbered point to point line are not really two routers at all, but rather two half-routers that together make up a single virtual router. The unnumbered point to point line is essentially considered to be an internal bus in the virtual router. The two halves of the virtual router must coordinate their activities in such a way that they act exactly like a single router.
This scheme fits in well with the IP architecture, but suffers from two important drawbacks. The first is that, although it handles the common case of a single unnumbered point to point line, it is not readily extensible to handle the case of a mesh of routers and unnumbered point to point lines. The second drawback is that the interactions between the half routers are necessarily complex and are not standardized, effectively precluding the connection of equipment from different vendors using unnumbered point to point lines.
Because of these drawbacks, this memo has adopted an alternate scheme, which has been invented multiple times but which is probably originally attributable to Phil Karn. In this scheme, a router that has unnumbered point to point lines also has a special IP address, called a router-id in this memo. The router-id is one of the router's IP addresses (a router is required to have at least one IP address). This router-id is used as if it is the IP address of all unnumbered interfaces.