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The way the Internet works is that "packets" are sent to an "address". It's the same principle how we send envelopes through the mail. Just put an address on it, hand it to the nearest "router", and the packet will get forwarded hop-to-hop through the Internet in the direction of the destination.
What you see as the address at the top of your web browser, like "www.google.com" or "facebook.com" is not the actual address. Instead, the real address is a number. In much the same way a phonebook (or contact list) translates a person's name to their phone number, there is a similar system that translates Internet names to Internet addresses.
There are only 4 billion Internet addresses. It's a number between between 0 and 4,294,967,296. In binary, it's 32-bits in size, which comes out to that roughly 4 billion combinations.
For no good reason, early Internet pioneers split up that 32-bit number into four 8-bit numbers, which each has 256 combinations (256 × 256 × 256 × 256 = 4294967296). Thus, why write Internet address like "192.168.38.28" or "10.0.0.1".
Yes, as you astutely point out, there are many more than 4 billion devices
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