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TCP/IP Guide by Charles M. Kozierok

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PPP Encryption Control Protocol (ECP) and Encryption Algorithms

The PPP authentication protocols Password Authentication Protocol (PAP) and Challenge Handshake Authentication Protocol (CHAP) can be used to ensure that only authorized devices can establish a PPP connection. Once that is done, PPP normally provides no other security to the data being transmitted. In particular, all data is normally sent in the clear (unencrypted), thereby making it easy for someone who intercepts it to read.

For important data that must be kept secure, encryption prior to transmission is a good idea. This can be done at higher layers using something like IPsec, but PPP also provides an optional feature that allows data to be encrypted and decrypted at the data link ...

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