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Dynamic Host Configuration Protocol (DHCP) is a network management protocol used to automate the process of configuring devices on IP networks, thus allowing them to use network services such as DNS, NTP, and any communication protocol based on UDP or TCP. 

How it works

A DHCP server enables computers to request IP addresses and networking parameters automatically from the Internet service provider (ISP), reducing the need for a network administrator or a user to manually assign IP addresses to all network devices. In the absence of a DHCP server, a computer or other device on the network needs to be manually assigned an IP address, or to assign itself an APIPA address, the latter of which will not enable it to communicate outside its local subnet.

DHCP can be implemented on networks ranging in size from home networks to large campus networks and regional ISP networks.  A router or a residential gateway can be enabled to act as a DHCP server. Most residential network routers receive a globally unique IP address within the ISP network. Within a local network, a DHCP server assigns a local IP address to each device connected to the network.