Without MAC addresses, we would have a group of nameless computers on your LAN. Therefore, at the data link layer, a header, and possibly a trailer, is added to upper layer data. The header and trailer contain control information intended for the data link layer entity in the destination system. Data from upper layer entities is encapsulated in the data link layer header and trailer.

To learn more about how these OUIs are assigned, and to search for current address assignments, go to:

Every computer has a unique way of identifying itself. Each computer, whether it is attached to a network or not, has a physical address. No two physical addresses are ever alike. Referred to as the Media Access Control address (or MAC address), the physical address is located on the Network Interface Card (NIC). -

Before it leaves the factory, the hardware manufacturer assigns a physical address to each NIC. This address is programmed into a chip on the NIC. Since the MAC address is located on the NIC, if the NIC were replaced in a computer, the physical address of the station would change to that of the new MAC address. MAC addresses are written using hexadecimal (Base 16) numbers. There are two formats for MAC addresses: 0000.0c12.3456 or 00-00-0c-12-34-56.

Ethernet and 802.3 LANs are broadcast networks. All stations see all frames. Each station must examine every frame to determine whether that station is a destination.

On an Ethernet network, when one device wants to send data to another device, it can open a communication pathway to the other device by using its MAC address. When a source device sends data out on a network, the data carries the MAC address of its intended destination. As this data propagates along the network media, the NIC in each device on the network checks to see if its MAC address matches the physical destination address carried by the data frame. If there is no match, the NIC discards the data frame. 

As data travels along the wire, the NIC in each station checks it. The NIC verifies the destination address in the frame header to determine if the packet is properly addressed. When the data passes its destination station, the NIC for that station makes a copy, takes the data out of the envelope and gives it to the computer.

An important part of both encapsulation and decapsulation is the addition of source and destination MAC addresses. Information cannot be properly sent or delivered on a network without these addresses.

MAC addresses are vital to the functioning of a computer network. They provide a way for computers to identify themselves. They give hosts a permanent, unique name. The number of possible addresses is not going to run out anytime soon, since there are 16^12 (or over 2 trillion!) possible MAC addresses. 

MAC addresses do have one major disadvantage. They have no structure, and are considered flat address spaces. Different vendors have different OUIs, but they're like personal identification numbers. As soon as your network grows to more than just a few computers, this disadvantage becomes a real problem.