Definition
Network Address Translation is the practice of rewriting the source or destination IP addresses in packet headers as they cross a router. The most common form, source NAT, lets multiple devices on a private network (e.g., 192.168.1.0/24) share a single public IP address by translating outgoing connections and tracking the mappings to route replies back. NAT is what allows a typical home with a dozen devices to share one ISP-assigned IP.
Carrier-Grade NAT
When ISPs ran out of public IPv4 addresses to give every customer, they began using Carrier-Grade NAT (CGNAT) — putting hundreds or thousands of customers behind a single public IP. CGNAT breaks port forwarding, frustrates peer-to-peer protocols, and confuses geolocation. A user behind CGNAT who needs a publicly reachable address often turns to a VPN with port forwarding precisely because the CGNAT-equipped ISP can no longer provide one.
VPNs and NAT
VPN servers also typically use NAT: many users behind one VPN server share one or a few public IPs. This is the 'shared IP' privacy benefit — your traffic is mixed with others' on the same external address. It also creates challenges for hosting services from inside the VPN, which is why some providers offer dedicated IPs or port forwarding as paid features.