How does paid Web Hosting Work
There are three different ways in which you can get paid web hosting. The cheapest and most common method is through shared hosting, which means your site is hosted along with many others, all on the same sever. This does not affect the visitor in any way, and shared hosting is a capable way of hosting the majority of websites.
If you plan to run a busy site, or one that will require a lot of bandwidth, then you should consider your own dedicated server. This means that all of the hard-drive space, processor and other resources will be used solely for your site. You should bear in mind however, that in this arrangement the server is still owned by the web hosting company, and you are simply renting it. The third option is a co-located server, where you own the server and pay the web hosting company to house it and connect it to the internet.