A firewall monitors incoming and outgoing network traffic and decides whether to allow or block specific traffic based on security rules. It establishes a barrier between internal trusted networks and external untrusted networks like the Internet. A firewall can be hardware, software, or both. There are different types of firewalls including proxy firewalls, stateful inspection firewalls, unified threat management firewalls, next-generation firewalls, and threat-focused next-generation firewalls.