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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, and it uses the internet for phone calls instead of traditional landlines. There are two types of phones that work on a cloud-based system: hard phones, physical phones connected with an ethernet cable, and soft phones, software-based apps for devices like laptops and smartphones. Both offer the ability to make and receive calls using the cloud.