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The hosts file could be described as an address book. While the normal user
is used to access other computers on the internet using names (for example
security.kolla.de), every computer is accessed by a numeric address at a lower
level. You may already have seen this numeric addresses; they look like
127.0.0.1 for example.
Every time you try to access another computer by using his name, your
computer looks up his address in an address book. First it looks into a local
address book (the hosts file), and only if it can't find the address there it
looks in a very big address book in the internet.
So if you want to block an internet website, you could simply redirect this
sites name to a place where nothing will be delivered from. Such a place would
be your computer for example. The address I already mentioned, 127.0.0.1 is an
address that will always point to the local - your - computer. By adding an
entry to the hosts file (your local address book) that redirects an ad site to
your machine, you would trick your internet browser to think that ad site would
be on your machine, and as your machine doesn't deliver ads, it wouldn't get the
ad and it will not be displayed.
Another way of using the hosts file is if you want to access computers that
are not listed in any address book yet. For example if you have a local
network, you wouldn't list your local computers in any internet address book,
if only because that would be very expensive. So you could just enter them
into the local address book (your hosts file).
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