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In this video tutorial, Tony from Nextiva explains what a VoIP phone is and how it works. VoIP stands for voice over internet protocol, allowing phone calls to be made over the internet instead of traditional landlines. There are two types of phones for a cloud-based phone system: hard phones, physical phones connected to the internet with an ethernet cable, and soft phones, software-based apps that can be downloaded to devices like laptops, tablets, or smartphones for making and receiving calls.