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Today, Tony from Nextiva explains what a VoIP phone is and how it works. VoIP stands for voice over internet protocol, which uses the internet to make phone calls instead of traditional landlines. There are two types of phones that work on a cloud-based phone system: hard phones, which are physical phones connected to the internet using an ethernet cable, and soft phones, which are software-based apps that allow you to make and receive calls on devices like laptops, tablets, and smartphones.