In computing the term localhost refers to the location of the currently used system. It is a loopback device which is assigned the IP address 127.0.0.1 in IPv4, or ::1 in IPv6, which can be used by TCP/IP applications to talk to themselves if this is needed.

Being able to communicate with one's local machine as though it were a remote machine is useful for the purposes of testing, and also to contact services (such as game servers) located on one's own machine that are expected to be remote.

Related Specification of IETF

IETF document "Special-Use IPv4 Addresses"(RFC3330) describes the 127.0.0.0/8 as a reserved IPv4 address block for loopback.

This address block will not be allocated or assigned to any organization or ISP. Any packet with an address of this address block '127.0.0.0/8' cannot appear outside of a host system. Within a host system, the loopback interface is normally assigned the address '127.0.0.1' with subnetwork mask '255.0.0.0'. This makes the routing table of the local system set with a routing entry of '127.0.0.0/8', so that packets destined to any address of this '127.0.0.0/8' would be routed internally within the local system.

On the other hand, only one IPv6 address ::1/128 is specified as loopback address in IPv6 addressing architecture specification of RFC3513.

In RFC3513, the specification says: "The loopback address must not be used as the source address in IPv6 packets that are sent outside of a single node. An IPv6 packet with a destination address of loopback must never be sent outside of a single node and must never be forwarded by an IPv6 router. A packet received on an interface with destination address of loopback must be dropped."

• RFC3330, "Special-Use IPv4 Addresses"
• RFC3513, "Internet Protocol Version 6 (IPv6) Addressing Architecture"

Humor

• There is a common computer nerd joke, "There's no place like 127.0.0.1"
• "127.0.0.1? Nice FTP site, but I already have that stuff."