IP Camera stands for Internet Protocol Camera
An Internet Protocol Camera is a Digital Video Camera that sends images over the network (LAN) and the Internet.
IP Camera records images in the very same way as a digital camera. The difference is that IP Camera compresses and encrypts the footage before transmitting and sends it over the network cable (cat5) instead of a coaxial cable.
If you would like to to know how to set up an IP camera without the NVR just watch this short video:
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