With the explosion of the Internet and the increase in home networks and business networks, the number of available IP addresses is simply not enough. The obvious solution is to redesign the address format to allow for more possible addresses. This is being developed (called IPv6), but will take several years to implement because it requires modification of the entire infrastructure of the Internet.
This is where NAT comes to the rescue. Network Address Translation allows a single device, such as a router, to act as an agent between the Internet ( "public network") and a local (or "private") network. This means that only a single, unique IP address is required to represent an entire group of computers.
NAT also blocks your private network from the world.
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