IP addresses are essential for the internet to function properly because they act as unique digital addresses for every device connected to a network. This allows devices to locate and communicate with each other efficiently. When data is sent over the internet, it is broken into packets, each containing the source and destination IP addresses, so the data can be routed accurately from one device to another. Without IP addresses, devices would not be able to find each other, leading to confusion and failure in communication. Essentially, IP addresses enable the internet to operate as an organized system, directing data traffic, allowing seamless connectivity and communication between millions of devices worldwide.