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Tony from Nextiva explains what a VoIP phone is and how it works. VoIP stands for voice over internet protocol, which uses the internet for making phone calls instead of traditional landlines. There are two types of phones for a cloud-based phone system: hard phones, physical devices connected via ethernet, and soft phones, software-based apps for making calls on laptops or smartphones. Hard phones look like traditional desk phones, while soft phones offer flexibility for making calls from any device.