Routing – by definition – works with IP addresses. Some routers use fiber cable, and some use copper cables, but they generally do the same things. The differences between routers like you have at home and those super expensive cisco ones is the amount of stuff they can do aside from juggling IP addresses. There are *a lot* of these things, so to make it short, these IP routing capable ones you were thinking of are basically for any application that goes above “one household wants to google cat videos”.
As for IPs and routing itself, it works almost exactly like postal addresses. You have an address and a zip code and the mail company has a database where all these addresses are noted down so the mailman knows where the mail has to go. And if you think about various postal offices and logistics centers communicating with each other to make sure each item is delivered to the right address, this is basically what routers ultimately do too.
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