The main difference between RIPv1 and RIPv2 is classless routing. RIPv2 incorporates the addition of the network mask in the update to allow classless routing advertisements. This is extremely important for the flexibility needed to efficiently utilize network assignments for an ever-shrinking pool of IP addresses.
There are other differences, as well. In RIPv2, the destination address for the updates is multicast, instead of broadcast, as in RIPv1. This reduces the burden on the network devices that do not need to listen to RIP updates. With broadcast, every device on the broadcast domain must at least open the IP packet and process the initial information to determine relevance. With multicast addressing, if a device needs that information, it will listen to that specific address. If it does not need the RIP information, it does not have to process the multicast address. The multicast address RIPv2 sends to is 220.127.116.11.
Another addition to RIPv2 is authentication. Authentication is used to ensure that routes being distributed throughout the network are coming from authorized sources.
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