IPv4 uses a Variable length header which allows  40 bytes of optional information after the basic part of the header,  but that way of supporting options has not been successful for various reasons like performance penalty incurred and the 40 byte limit.
In IPv6 the same is supported as extension headers which can be present or not depending on what type of packet you are sending. Hop by Hop options header is one of extension header's which is present immediately after the IPv6 Header which supports carrying large packets up to 4GB. The basic part of the header limits the size to 16bits. This option header carries 32bit payload length field for such large packets. Also it supports Router Alert Option which is used to indicate to the router that the contents of the packet require additional processing.
 
Refer RFC2460 for further details.
 
>>> "Venkat Bandaaru" <[EMAIL PROTECTED]> 08/30/01 06:50AM >>>
Hi ,
I am new to networking, and my work is related to ipv6 development.
I have a basic question, why do we need the hop-by-hop extension header.

If you feel this is a silly question to ask in the forum ,
please provide me some source from where I can understand all the things.

Thanks and Regs

-Venkat

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