Cloud network security groups are virtual firewalls used in cloud computing to control incoming and outgoing traffic to resources like virtual machines. The process starts by creating a security group and defining rules that specify which traffic is allowed or denied, based on criteria such as protocol type, port number, and source IP address. These security groups are then attached to cloud resources. When traffic arrives, it is checked against the rules in the security group. If the traffic matches an allow rule, it is permitted; otherwise, it is blocked by default. For example, if a security group allows TCP traffic on port 80 from any IP address, incoming web requests on that port will be allowed, while other traffic, such as SSH on port 22, will be blocked unless explicitly allowed. This mechanism helps protect cloud resources by controlling network access effectively.