What is NAT and why is it used?

NAT (Network Address Translation) maps private IP addresses to public IP addresses, allowing multiple devices to share one public IP. Types: Static NAT (1:1 mapping), Dynamic NAT (pool of public IPs), PAT/NAPT (one public IP, different ports - most common). Benefits: conserves IPv4 addresses, provides some security (hides internal network), enables private addressing. Challenges: breaks end-to-end connectivity, complicates peer-to-peer, requires special handling for some protocols.