What is VoIP?

From Voxalot FAQ

VoIP (or voice over Internet Protocol) is the biggest emerging technology in telephony, and it is available for you to use today. Essentially it is a method for taking the audio signals from your telephone handset (or your computer microphone) and turning these into digital data that can be transmitted over the Internet.

This is significant because the internet is free to use, and this technique dramatically reduces the cost of telephony. VoIP happens in real time and if configured properly the quality can be almost exactly the same compared with regular PSTN telephony.