Implementing dynamic NAT automatically creates a firewall between your internal network and outside networks, or between your internal network and the Internet. NAT only allows connections that originate inside the stub domain. Essentially, this means that a computer on an external network cannot connect to your computer unless your computer has initiated the contact. You can browse the Internet and connect to a site, and even download a file; but somebody else cannot latch onto your IP address and use it to connect to a port on your computer.
In specific circumstances, Static NAT, also called inbound mapping, allows external devices to initiate connections to computers on the stub domain. For instance, if you wish to go from an inside global address to a specific inside local address that is assigned to your Web server, Static NAT would enable the connection.
Some NAT routers provide for extensive filtering and traffic logging. Filtering allows your company to control what type of sites employees visit on the Web, preventing them from viewing questionable material. You can use traffic logging to create a log file of what sites are visited and generate various reports from it.
NAT is sometimes confused with proxy servers, but there are definite differences between them. NAT is transparent to the source and to destination computers. Neither one realizes that it is dealing with a third device. But a proxy server is not transparent. The source computer knows that it is making a request to the proxy server and must be configured to do so. The destination computer thinks that the proxy server IS the source computer, and deals with it directly. Also, proxy servers usually work at layer 4 (transport) of the OSI Reference Model or higher, while NAT is a layer 3 (network) protocol. Working at a higher layer makes proxy servers slower than NAT devices in most cases.
A real benefit of NAT is apparent in network administration. For example, you can move your Web server or FTP server to another host computer without having to worry about broken links. Simply change the inbound mapping at the router to reflect the new host. You can also make changes to your internal network easily, because the only external IP address either belongs to the router or comes from a pool of global addresses.
NAT and DHCP (dynamic host configuration protocol ) are a natural fit. You can choose a range of unregistered IP addresses for your stub domain and have the DHCP server dole them out as necessary. It also makes it much easier to scale up your network as your needs grow. You don't have to request more IP addresses from IANA. Instead, you can just increase the range of available IP addresses configured in DHCP to immediately have room for additional computers on your network.