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Tony from Nextiva explains what a VoIP phone is and how it works. VoIP stands for voice over internet protocol and uses the internet to make calls instead of traditional landlines. There are two types of phones - hard phones, which are physical devices connected to the internet via ethernet cable, and soft phones, which are software-based apps that allow you to make calls on laptops, tablets, or smartphones. Both types of phones work on a cloud-based phone system, providing flexibility in making and receiving calls from various devices.