In addition to provider allocated addresses IPv6 introduces a number of addresses classes that are allocated by other authorities or by the local enterprise.
There are unicast address classes to support OSI NSAP addresses and Novel IPX addresses. In both cases a prefix identifies the type of encapsulated address and the remaining bits are used to encode the original (non-IP) addresses.
Prefix 1111 1110 specifies a local address. Local addresses are intended to be used to support internets that are not connected to the global Internet. The provide a better alternative to using un-allocated addresses or addresses allocated to other nodes. If global addresses are used on an isolated internet there is potential for confusion if the local internet is ever connected to the global one. Local addresses ease this problem. When a local internet is connected to the global Internet the local prefix of addresses can be replaced with the appropriate subscriber prefix. Local subnet and node identifiers can remain unchanged.