This white paper discusses security challenges in virtual networks and alternatives for securing them. Traditional network security tools cannot see or control traffic between virtual machines on the same host. Mixing VMs with different trust levels on one host poses risks. While some try to apply physical network security to virtual networks through VLANs, this increases complexity and costs as VM usage grows. The paper proposes a next-generation security solution called Firefly Host that is designed specifically for virtual networks to monitor and control inter-VM traffic while maintaining the benefits of virtualization.