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The Point-to-Point Protocol (PPP) provides a standard method for transporting multi-protocol datagrams over point-to-point links. PPP is comprised of three main components:

● A method for encapsulating multi-protocol datagrams.
● A Link Control Protocol (LCP) for establishing, configuring, and testing the data-link connection.
● A family of Network Control Protocols (NCPs) for establishing and configuring different network-layer protocols.

The Challenge Handshake Authentication Protocol (CHAP) (defined in RFC 1994) verifies the identity of the peer by means of a three-way handshake. These are the general steps performed in CHAP:

After the LCP (Link Control Protocol) phase is complete, and CHAP is negotiated between both devices, the authenticator sends a challenge message to the peer.

The peer responds with a value calculated through a one-way hash function (Message Digest 5 (MD5)).

The authenticator checks the response against its own calculation of the expected hash value. If the values match, the authentication is successful. Otherwise, the connection is terminated.

This authentication method depends on a “secret” known only to the authenticator and the peer. The secret is not sent over the link. Although the authentication is only one-way, you can negotiate CHAP in both directions, with the help of the same secret set for mutual authentication.

For more information on the advantages and disadvantages of CHAP, refer to RFC 1994