Voice over Internet Protocol is a category of hardware and software that enables people to use their digital network as the transmission medium for telephone calls by sending voice data in packets using IP rather than by traditional circuit transmissions of the PSTN.
VoIP can turn a standard internet connection into a way to place phone calls, thereby replacing the traditional phone system.
There are 3 types of VoIP applications;
Analog Telephone Adaptor (ATA)
The ATA is an analog-to-digital converter which allows you to connect a standard phone to your computer or your Internet connection for use with VoIP. The ATA converts the analog signal from your traditional phone into digital data for transmission over the Internet.
These specialized phones look just like normal phones with a handset, cradle and buttons. Instead of having the standard RJ-11 phone connectors, IP phones have an RJ-45 Ethernet connector which connects directly to your (internet) router. IP phones come with all the hardware and software necessary to handle the IP call.
No actual phone is needed as the computer serves that purpose. Instead, you need the applicable software, a microphone, speakers, a sound card and an Internet connection. There are several companies offering free or very low-cost software that you can use for this type of VoIP.