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Requirements: USERNAME and PW created for PEERING/AUTHENTICATING DEVICES. eg– If R4 is connecting, a local user of R4 will need to exist. Passwords for authenticating devices will need to be consistent. No PW is sent over the WIRE. Only Hostname, magic#. CHAP uses it's local PW along with the hostname/Magic# of peering device and hashes it via MD5SUM. The MD5 hash is sent to each router. If the hash matches, the routers will authenticate and bring up the PPP link.

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