This mechanism allows devices on a private IPv6 network to communicate with devices on a public network, and vice versa, by modifying the IPv6 addresses and potentially port numbers in the IP header. This enables multiple devices within a local network, utilizing non-routable or private IPv6 addresses, to share a single public IPv6 address when communicating externally. In a scenario where a home network needs to access internet resources, this process facilitates the communication by translating the private addresses of internal devices to a globally unique, routable address.
Its implementation addresses several key aspects of network management. Historically, it was seen as a solution for IPv4 address exhaustion, but it maintains relevance in IPv6 for security and address management. It allows administrators to hide the internal network topology, increasing security by preventing direct access to internal devices from the public internet. Furthermore, it provides flexibility in internal address allocation, allowing for easier network renumbering and simplifies network management tasks.