Because MAC addresses are only usable across the local network segment, we use IP addresses to communicate with other segments via routers. Meanwhile, for local targets, ARP is used to translate IPs into MAC addresses and the MAC addresses are used from then on in the conversation.
This leaves me to wonder why we use IP addresses at all on the local network. Given a scenario where all systems are in the same subnet, it would seem that IP addresses are then superfluous since the systems are only really using MAC addresses to route communications between each other.
Could computers actually do without IP addresses entirely, if they do not need to communicate outside the local network segment? Why don't they?
Quite simply, it is a lot easier and very little overhead to do the same thing for people inside your network segment as outside your network segment.
Some other possible reasons
IP addresses are explicitly not designed to be bound by hardware where as MAC addresses are. MAC addresses can be changed temporarily most of the time but each device is supposed to have a globally unique factory assigned MAC address.
Furthermore, MAC is specific to Ethernet, and while it is now the defacto Layer 2 encapsulation method, it wasn't always the case and you never know if something better will come along in the future.
In short, no... you don't need IP addresses to connect machines in the same network. There are several examples of protocols like this like: IPX or Banyan protocols.
The problem with using hardware-addresses is best described like this:
Imagine for a moment that computers are people in a room... (everyone is glued to 1 spot and can't move around) If Bob wants to talk to Suzy... he shouts out "Hey Suzy"... and Suzy responds... and a conversation ensues. Great right? Sure... on a small scale this works quite well and is actually used regularly in some networking protocols between two (or a few) devices. (Many high I/O protocols use non IP protocols because they're much "simpler" and finely tuned for the task.) The Internet (as we know it today) is not just 2... or a few people talking directly to each other. The internet is literally BILLIONS of devices. If they were all placed into the same "room" (network-segment)... Imagine what would happen if Bob wanted to talk to Suzy. Bob would yell "Hey Suzy!"... and Bob's voice would be lost in the crowd. (Building a room to fit BILLIONS of people is equally ridiculous.)
For this reason, networks are segmented into "smaller rooms" which allow people who are in the same segment (room) to talk directly to each others, but people outside the room you need some sort of router to pass messages from one room to the next room. But the vast number of rooms means you need some sort of addressing scheme so the various routers in the middle know how to get a message from Bob to Suzy. With the IP protocol, they assign a subnet to each "room", and the routers are told how to pass a message from one room to the next. For example, if Bob's address is 22.214.171.124, and Suzy's address 126.96.36.199, and Bob's subnet is 188.8.131.52/24 (meaning the first 3 bytes of his address must match for it to be in his room), Bob needs to pass his message to the router so it can be passed along to Suzy's "room*. Bob knows his router is 184.108.40.206, so he passes the message to the router, and the router passes it along to other routers in the middle until the message is passed to Suzy's router at 220.127.116.11, which hands the message directly to Suzy... and Suzy can send the reply back to Bob in the same way.
Computers in the same subnet actually do communicate directly with each other using the MAC address. It actually starts by sending out an ARP request (ARP = Address Resolution Protocol) which means it shouts out "Who has the address X.X.X.X?"... and whoever has that address replies and from that point on, they continue to talk to each other directly.
(I can continue this analogy and explain a great deal more of how the Internet works if you're really interested.)
In theory, there's no reason that we couldn't just use Ethernet MAC addresses to communicate on a LAN segment.
In fact, as someone mentioned upthread, that's pretty much the way it works: your laptop sends out an ARP request saying "I'm 11:22:33:aa:bb:cc, my IP is 10.10.10.20 - who has 10.10.10.10?", your NAS responds to say "I'm x.x.x.10 and my MAC address is aa:bb:cc:11:22:33!". Subsequent packets between your laptop and the NAS will have the appropriate MAC address in the Ethernet frame header.
So, why do I say 'in theory'?
Well, in practise, the Ethernet standard provides a mechanism by which devices can locate each other on a network segment; this is useful, because it means that devices that aren't participating in a network conversation don't have to listen to it and that switches can track what physical port each device is connected to. It reduces the amount of network chatter on a segment and increases the overall throughput of the network.
Unfortunately, there's a lot of great stuff that's provided by the TCP/IP stack that Ethernet doesn't provide, and with good reason. These missing features would need to be implemented by the developers of each networked application, which is a hell of a lot of work to go to when every modern operating system has, at the very least, a TCP/IPv4 stack and probably also has an IPv6 one.
There's also the simple fact that simple network often don't stay simple - sooner or later you're going to want to connect your LAN to the internet or to another LAN; IP is routable, MAC addresses aren't.
On networks that use the TCP/IP protocol, why is the IP address translated into a MAC address?
I mean, when every device knows its IP, why further use the MAC address and not use the IP number as the address directly?
The main difference is that the IP address is used by IP which is a network protocol, and the MAC address is used by Ethernet a link layer ( 2 ) protocol. IP can run over different layer 2 protocols, so it doesn't include the "media access" functionality. You can run IP over Serial lines, Ethernet, DSl, ISDN, etc.
For example, DHCP provides dynamic IP addresses over Ethernet; the DHCP server needs the MAC address so it can assign an IP address to a PC.
They are for different layers in the network stack. The MAC address is about the ethernet networking layer and the IP address is about, well the IP layer. You can use IP over different transports like SLIP where there is not MAC because there is not ethernet. You can also use protocol different than IP over ethernet if you wanted to.
If you think about it, if I dial in over a SLIP connection one IP packet could start with not MAC associated and then have a different MAC as it hops from one router to another as it is forwarded across the internet to the final IP destination.
MAC addresses are guaranteed to be unique to the machine (the network card typically contains the MAC address) and unchanging, whereas you can redefine the IP address on any given machine.
Additionally, public IP addresses can be shared by a whole company using Network Address Translation, so public IP addresses are not guaranteed to have a one-to-one correspondence with a machine or person.
Another way to look at this is to ask the reverse question: Why do we need IP addresses when we already have MAC addresses assigned to the hardware?
This was discussed in episode #29 of the Security Now podcast (HTML transcript).
With MAC addresses, our computers can directly communicate to a single machine. But, in order to know how to get there, we need to have our packets routed to it. It's impractical to have a global MAC address lookup table on each of our computers.
IP addresses, on the other hand, are hierarchically organized. Our computers can determine which IP addresses are on the LAN and the rest get sent to the LAN's gateway (e.g. a home router). After leaving the LAN, successive routers look at the IP address and route the packets on to another router. Eventually, a router which has the destination IP address on its LAN can identify the MAC address and send the packet to the destination computer.
I could answer your question with another question: You have a phone number, so why do you need a social security number/national identification number?
In other words, they serve different purposes. One is for identifying who you are (SSN, MAC), whereas the other is for defining how to reach you (phone number, IP address).
Further, it's possible to reach someone on the phone if they don't have a SSN (different country, for example) just like it's possible to reach someone on the Internet if they don't have a MAC (different type of link layer). Different link layers have different methods of identifying the destinations and sources of data packets.
You don't know the MAC address of stackoverflow.com because it's not in your local network.
MAC addresses are used as an identifier to the next hop in the chain.
The "IP" is just used in a protocol that has a hint of in what direction it should send your packet (which gateway to use next).
Because MAC addresses are needed for communication on the Link Layer (IP addresses are used one layer up on the IP layer).
The IP is either defined in the OS or in the driver software for your network card, or given to you by your network, and can be changed dynamically. The MAC is an identifier for your network card, i.e. the hardware. There is not a 1-to-1 relationship between them.
Lets take a example
If you apply for job in company.. will they give you that without knowing your identity? certainly not.... so your actual identity proof is Mac address
and when you join the company they will give another employee ID to communicate among that company employees.. this is IP address.
your employee ID can be modified if you change company but your actual info about you can never be changed (age,name,etc)....
IP address are like ZIP codes or like country codes or an ISD codes, wchich simplifies the location address otherwise its is very difficult to sort all the MAC address or to identify the exact location else the computer will take hell of time identifying the address or keeping huge database of MAC address on local computer.