Interface Addressing Options for Local Devices

PPP configuration also requires attention to layer 3 addressing. In this section, IP addressing
considerations are presented due to both their complexity and frequency. These include static,
IP unnumbered, and dynamic addressing options:
Static addressing
Clearly, the use of static addresses is the most basic IP addressing technique.
Static addresses are entered on each interface manually and require administration and
documentation. The benefit of static addresses is supportability—troubleshooting is simplified
with statics. However, there is a substantial amount of administration overhead. Static
addresses are well suited to the central office remote access server.
IP unnumbered
An alternative to static addressing is the use of IP unnumbered. This is not a
dynamic solution, which will also be explained in this section, but rather a feature that Cisco provides
to allow a point-to-point link to share an IP address from another interface. For example,
the remote router might be configured with a static IP address on its Ethernet interface, whereas the
serial interface could be configured with an unnumbered interface, effectively using the same IP
address assigned to the Ethernet port. The down side of this solution is that the troubleshooting
options are more limited. An alternative to using a physical interface is to use the loopback interface.
Some argue that this interface is best used with IP unnumbered because, theoretically, it can never
go down.

NOTE:Cisco documentation presents the loopback interface as one that can never
go down; however, administrative errors can disable the interface. Overall, it
remains a better alternative than a physical interface.

Dynamic addressing
Dynamic addressing is an excellent solution in a number of installations,
especially those that use modem-attached workstations from a remote location. The administrator
can configure a pool of addresses that are assigned on a per-call basis rather than manually
assigning a single IP address for each user. This greatly reduces the number of addresses
that must be assigned and simplifies the administrative tasks. These assignments typically use
DHCP, Dynamic Host Configuration Protocol.