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A software firewall is primarily distinguished by its ability to run on a specific operating system, utilizing the existing resources of the host computer. While a software firewall can indeed filter traffic through multiple network interfaces, this capability is not exclusive to it; both software and hardware firewalls can handle multi-interface traffic.
The defining characteristic, however, lies in its reliance on the software environment of the operating system, which differentiates it from a hardware firewall that is a standalone device, often with dedicated resources to manage security without depending on the host's operating system. This means that software firewalls are usually easier to install and configure on existing systems, as they require the host machine's processing power to operate. Thus, while filtering traffic is a crucial function, it is the operation on a specific operating system that fundamentally defines software firewalls compared to hardware firewalls.