My website shares the same IP address with a lot of other internet sites (approx 500 sites) that are not mine. How is this possible? is this affecting my SEO?
Shared hosting uses one server for many sites and is pretty common (although I've never heard of as many as 500 on one server before).
Contrary to what others said, there is a small chance it could affect SEO. If the majority of the other 500 sites are spammy, pornographic, virus-ridden sites then you could be classed as being in a "bad neighbourhood" and devalued in search.
This is even moreso the case if you don't have your own domain name (eg
yoursite.host.com) as the parent domain could end up being banned.
However this is rare and almost certainly nothing to worry about.