How does Magic Jack Work?

How does magic jack work?

• specifically I'm wondering whats the difference between the workings of magic jack vs. Vonage. Not cost or features. why is one cheaper and why aren't there more magic jack-type competitors

• Answer:

  Magicjack uses the computer to power the device, supply Internet connection, and do some processing. The Magic jack hardware is a composite USB device with a phone interface, audio device ( to send/receive audio on the phone device), and memory that contains the software loaded to the computer, and which holds the individual identity of the device. Vonage has all the phone interface electronics, dedicated processing, network connection, and power supply (except a mains transformer) in one box. There have been and are MagicJack like devices and services, but likely don't have the marketing Magicjack does.