1. Introduction
Network addresses are used to identify various resources on a network.
In this tutorial, we’ll review the difference between 127.0.0.1 and localhost. First, we’ll define what they are and where and how they are used. Lastly, we’ll depict the difference between the two terms. Let’s start with some definitions.
2. What Is 127.0.0.1?
127.0.0.1 is an IP address that is specifically assigned to the loopback interface, i.e a loopback address. 127.0.0.1 is a non-routable, private IP address used to establish a connection with the same device on which the address was entered. For example, entering the command 
in a command prompt window will connect with the originating device:
C:\Users>ping 127.0.0.1 Pinging 127.0.0.1 with 32 bytes of data: Reply from 127.0.0.1: bytes=32 time<1ms TTL=128 Reply from 127.0.0.1: bytes=32 time<1ms TTL=128 Reply from 127.0.0.1: bytes=32 time<1ms TTL=128 Reply from 127.0.0.1: bytes=32 time<1ms TTL=128 Ping statistics for 127.0.0.1: Packets: Sent = 4, Received = 4, Lost = 0 (0% loss), Approximate round trip times in milli-seconds: Minimum = 0ms, Maximum = 0ms, Average = 0ms
So why do we need to establish a connection with the originating device? In some cases, we would want to validate the Internet Protocol (IP) stack on a device connected to the network. It is used to test connection protocols. In addition, 127.0.0.1 allows us access to the network services running on the originating machine.
Now, this is particularly useful when developing applications, specifically web applications. For example, developers may host an application web server and configure the address as 127.0.0.1. Every time we enter this address, the local web server’s page is loaded.
It is also essential to note that 127.0.0.1 is not the only loopback address present on a device. There is a whole range associated with it. Consequently, any address from 127.0.0.1 to 127.0.0.255 will function in the same way.
3. What Is localhost?
The term localhost is usually used to refer to the local computer with the loopback address 127.0.0.1. As such, typing ‘localhost’ in the browser’s address bar will connect with the device itself. The purpose of localhost is to serve as a domain name for 127.0.0.1.
Therefore, we can say that localhost has the same function as a loopback address.
4. How Do They Work?
Let’s illustrate how they work with the Transmission Control Protocol/Internet Protocol (TCP/IP) model. The TCIP/IP model defines a standard for communication in IP networks. It is composed of four main layers illustrated below:
TCP layer in OSI model
Communication on the sender’s side is from top to bottom and vice versa on the receiver’s end.
A packet addressed to any of these two addresses on the sender’s side will first go through the application and transport layer. Upon reaching the Internet layer, once it is detected that the destination address is 127.0.0.1 or localhost, the packet is sent back to the device. It does not exit the local network.
5. What’s the Difference?
More often than not, localhost and 127.0.0.1 are used interchangeably. The two are considered the same thing. However, there are subtle differences that exist between them. Let’s look at these:
- Firstly, the IP address associated with localhost has to be resolved or looked up, while 127.0.0.1 does not usually require resolution.
- Secondly, localhost is not always resolved to 127.0.0.1. It may be resolved to another address within the loopback block of addresses.
6. Conclusions
In this article, we’ve explained 127.0.0.1 and localhost. We’ve described how it works and the purpose it serves. Lastly, we’ve identified application development as the main application of these two terms.