TCP/IP and Data Communications Administration Guide

Loopback Address

In Example 4-1, the IP address 127.0.0.1 is the loopback address, the reserved network interface used by the local machine to allow interprocess communication so that it sends packets to itself. The ifconfig command uses the loopback address for configuration and testing, as explained in "ifconfig Command". Every machine on a TCP/IP network must use the IP address 127.0.0.1 for the local host.