A firewall is a software program or device that monitors, and sometimes controls, all transmissions between an organization's internal network and the Internet. However large the network, a firewall is typically deployed on the network's edge to prevent inappropriate access to data behind the firewall. The firewall ensures that all communication in both directions conforms to an organization's security policy.
Network layer Firewalls
These generally make their decisions based on the source, destination addresses and ports in individual IP packets. A simple router is the ``traditional'' network layer firewall, since it is not able to make particularly sophisticated decisions about what a packet is actually talking to or where it actually came from. Network-level firewalls are fast, and today you'll find them built into most network appliances, particularly routers. These firewalls, however, don't support sophisticated rule-based models. They don’t understand languages like HTML and XML, and they are capable of decoding SSL-encrypted packets to examine their content. One thing that's an important distinction about many network layer firewalls is that they route traffic directly though them, so to use one you either need to have a validly assigned IP address block or to use a ``private internet'' address block. Network layer firewalls tend to be very fast and tend to be very transparent to users.
Application layer Firewalls
These generally are hosts running proxy servers, which permit no traffic directly between networks, and which perform elaborate logging and auditing of traffic passing through them. They can log user activity too. Application-level filtering may include protection against spam and viruses as well, and be able to block undesirable Web sites based on content rather than just their IP address. The downside to deep packet inspection is that the more closely a firewall examines network data flow, the longer it takes, and the heavier hit your network performance will sustain.
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