A common tool like a protocol analyzer can be hooked up to the network and the intruder can watch all data, including passwords, pass by. Data encryption is the answer. With encryption, data is scrambled before transmission, making it unreadable as it passes over the wire, even if it is intercepted. To scramble or encrypt this data, its bits must be transformed according to an algorithm. The data is transmitted, and at the receiving end, a system of keys is used to decode the bits into intelligible information.
Keys are necessary for encoding and decoding.
Encryption usually requires extra hardware because of the processing power required. Another standard used by the government, called CCEP, is more recently developed than DES and will someday supplant the older standard. DES defines how the data should be encrypted and the specifications for an electronic key. It uses one 64-bit key for encryption and decryption. This can cause problems because the key must be in the hands of the sender and receiver.