At the most basic level a router links two networks together, the network within your home (however big or small) and the network outside your home (in this case, the Internet). The broadband modem provided to you by your ISP is only suited to linking a single computer to the internet and usually does not include any sort of routing or switch functionality. A router performs the following functions:

• IP sharing: Your ISP assigns you one IP address. If you have a desktop, a laptop, a media box on your TV, and an iPad, that one IP address clearly isn’t going to cut it. A router manages those multiple connections and ensures that the right packets of information go to the right places. Without this function there would be no way for a person on the desktop and a person on the laptop to both browse the web as there would be no distinguishing between which computer was requesting what.
• Network Address Translation (NAT): Related to the IP sharing function, NATmodifies the headers in packets of information coming into and out of your network so that they get routed to the proper device. Think of NAT like a very helpful receptionist inside your router that knows exactly where every incoming/outgoing package should go and stamps the department on them accordingly.
• Dynamic Host Configuration: Without DHCP you would have to manually configure and add all the hosts to your network. This means every time a new computer entered the network you would have to manually assign it an address on the network. DHCP does that for you automatically so that when you plug your XBOX into your router, your friend gets on your wireless network, or you add a new computer, an address is assigned with no human interaction required.
• Firewall: Routers act as basic firewalls in a variety of ways including automatically rejecting incoming data that is not part of an ongoing exchange between a computer within your network and the outside world. If you request a music stream from Pandora, for example, your router says, “We’re expecting you, come on in” and that stream of data is directed to the device that made the request. On the other hand, if a sudden burst of port probing comes in from an unknown address your router acts as a bouncer and rejects the requests, effectively cloaking your computers. Even for a user with a single computer a simple $50 router is worth it for the firewall functionality alone.