What does NAT do?

Network Address Translation (NAT) is a technology that is primarily used to manage IP address space and facilitate connections between private networks and the internet. It functions by translating public IP addresses into private IP addresses and vice versa. This allows multiple devices on a local network to share a single public IP address when accessing the internet, thereby conserving the limited pool of available public IP addresses.

NAT operates at the network layer of the OSI model and can provide several benefits, including improved security by hiding the internal network structure and facilitating easier network management. By translating internal addresses to a single external address, NAT also aids in the flexibility of how devices are connected to the internet and enables access to resources without exposing the entire private network.

In contrast to the other options, NAT does not perform encryption or authentication of data, does not act as a caching mechanism, and is not primarily designed for traffic analysis. Its main focus is on the address translation process, which is vital for both connectivity and efficient address usage in an IP-based network.