IPv6
The current version of the Internet Protocol, with 128-bit addresses that make it possible to give every sensor a globally unique address without translation.
IPv4’s address space was too small for the number of connected devices long before IoT arrived, and private addresses behind NAT make devices hard to reach. IPv6 solves the first problem outright and eases the second: with stateless address autoconfiguration, a device can derive its own address from a router advertisement and be reachable end to end, subject to firewall policy.
For IoT the real impact came through 6LoWPAN, which compresses IPv6 headers enough to fit in IEEE 802.15.4 frames, and through Thread, which builds its whole mesh on IPv6 so a border router can forward packets without translation. Cellular networks increasingly hand out IPv6 to modules as well. The trade-off is that much of the cloud and enterprise world still runs IPv4, so dual-stack designs and translation at the edge remain common in practice. See Thread explained.
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