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"Do not confuse a proxy server with a NAT (Network Address Translation). Although they appear similar, a proxy server actually connects to, responds to, and receives traffic from the Internet. In other words, it acts on behalf of the client computer. A NAT, on the other hand, merely changes the origination address of traffic coming through it and passes it to the Internet. The computer behind the NAT, not the NAT itself, does the work. The NAT is intended to be transparent to the whole process. For those who understand the OSI (Open System Interconnection) model of networking, the technical difference between a proxy and a NAT is that the proxy server works on the transport layer (layer 4), or higher of the OSI model, whereas a NAT works on the network layer (layer 3)." Source: http://kb.iu.edu/data/ahoo.html
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