Security
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No data is encrypted at the TCP or IP layers; it is up to higher-level protocols such as SSL and TLS to perform this work. Because the data is unencrypted, it is very easy to gather important information like user names and passwords by sniffing the network. IPSec can encrypt data in order to help prevent data sniffing.
For more information about IPSec, see “Internet Protocol Security (IPSec)” in the Microsoft® Windows® 2000 Server Resource Kit TCP/IP Core Networking Guide.