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Web hosting is an online service that allows you to publish your website files onto the internet. So, anyone who has access to the internet has access to your website. In practice, it usually refers to the service you get from a web hosting provider.
Web hosting happens when the files that make up a website are uploaded from a local computer on to a web server. The server's resources, (RAM, hard drive space, and bandwidth) are allocated to the websites using it. The division of server resources varies depending on the type of hosting plan chosen.
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