A fundamental difference lies in how internal addresses are mapped to external ones. One method focuses on altering the source port number in addition to the IP address when translating from a private network to a public network. This allows multiple devices within the private network to share a single public IP address, with each device distinguished by a unique port. For instance, several computers browsing the web simultaneously can all appear to originate from the same public IP address, but each will use a different source port number.
This technique provides several advantages, primarily in conserving publicly routable IP addresses. In environments with a limited number of public IPs, it enables a larger number of internal devices to access the internet. This was particularly crucial in the transition to IPv4 exhaustion. It allows an organization to delay the expense and complexity of IPv6 deployment while still maintaining internet connectivity for its users. Security benefits are also realized, as internal network topology is effectively hidden from the outside world.
