Static IP address is where your computer uses the same IP address everytime it connects to internet. It’s permanent. Since the IP address is the same, other can identify who you are. It’s necessary if you need to connect to the same computer through VPN or if you host a website, email server or other types of server connections. It also eliminates the network traffic associated with DHCP and DNS.

Dynamic IP address is where your computer uses different IP addresses everytime it connects to internet. This IP address is not permanent and as needed basis. It’s assigned when you connect to internet by DHCP Server (Dynamic Host Configuration Protocol).

If you are connected to internet by dial up, every time you connect to internet, DHCP assignes you an IP Address for your connection and DNS (Domain Name Server) translates the URL request such as http://www.asknumbers.com in to an IP address for transmission. So, dynamic IP Address works with DHCP and DNS.