The Dynamic Host Configuration Protocol (DHCP) ensures that devices on a network automatically receive an IP address. Similar to the way parking spaces are allocated in a large garage, DHCP automatically assigns a free "slot" (an IP address) as soon as a device is added to the network. This eliminates the need for the administrator to manually configure each device.
DHCP makes it possible for devices to be integrated into a network quickly and easily – ideal for networks that have many devices and regular changes in the connection, such as in companies or home networks.
Indispensable today: Used in almost every home and corporate network. Only in highly secure or very small networks are static IPs sometimes used.
Classification in the OSI model:
Application Layer (Layer 7)
DHCP works at the application layer because it is used to manage IP addresses and communication between devices on the network.