2005-08-18: MAC (Media Access Control) addresses uniquely identify Ethernet network cards (or PCs with built in Ethernet). Although it's true that every computer that uses Ethernet has a unique MAC address, not all Internet connections are made over Ethernet. Also, MAC addresses in a particular local network are not similar in any way, so one can't use them to decide that a particular machine is "nearby."

IP addresses uniquely identify computers on the Internet, or on a local intranet. Computers on the same local "subnet," such as those on a particular local network, will share part of their IP address. For instance, computers in my office intranet are part of the 192.168.2.x subnet, with IP addresses like 192.168.2.100 and 192.168.2.101. The router that connects our office to the Internet has the IP address 192.168.2.1. That router also has a true Internet IP address, and performs NAT (Network Address Translation) to allow connections from computers inside my intranet to reach the outside world... but blocks incoming connections for security.

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