"Dynamic Host Configuration Protocol (DHCP) is an IP standard designed to reduce the complexity of administering IP address configurations." - Microsoft's definition. A DHCP server would be set up with the appropriate settings for a given network. Such settings would include a set of fundamental parameters such as the gateway, DNS, subnet masks, and a range of IP addresses. Using DHCP on a network means administrators don't need to configure these settings individually for each client on the network. The DHCP would automatically distribute them to the clients itself. The DHCP server assigns a client an IP address taken from a predefined scope for a given amount of time. If an IP address is required for longer than the lease has been set for, the client must request an extension before the lease expires.

If the client has not requested an extension on the lease time, the IP address will be considered free and can be assigned to another client. If the user wishes to change IP address then they can do so by typing "ipconfig /release", followed by "ipconfig /renew" in the command prompt. This will remove the current IP address and request a new one. Reservations can be defined on the DHCP server to allow certain clients to have their own IP address (this will be discussed a little later on). Addresses can be reserved for a MAC address or a host name so these clients will have a fixed IP address that is configured automatically. Most Internet Service Providers use DHCP to assign new IP addresses to client computers when a customer connects to the internet - this simplifies things at user level.

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