NAT converts the address of each LAN node into one IP address for the Internet and vice versa. It also serves as a firewall by keeping individual IP addresses hidden from the outside world. All input is forwarded out a different port, closing a straight path between two networks and preventing a hacker from obtaining internal addresses and details of a private network. It funnels all user requests to the Internet and fans responses back out to the appropriate users. Proxies may also cache Web pages, so that the next request can be obtained locally.
Proxies are only one tool that can be used to build a firewall.
Firewall - A method for keeping a network secure. It can be implemented in a single router that filters out unwanted packets, or it may use a combination of technologies in routers and hosts. Firewalls are widely used to give users access to the Internet in a secure fashion as well as to separate a company's public Web server from its internal network. They are also used to keep internal network segments secure. For example, a research or accounting subnet might be vulnerable to snooping from within.