Just like SLIP, PPP is a protocol to send datagrams across a serial
connection, but addresses a couple of deficiencies of the former. It
lets the communicating sides negotiate options such as the IP address
and the maximum datagram size at startup time, and provides for client
authorization. For each of these capabilities, PPP has a separate
protocol. Below, we will briefly cover these basic building blocks of
PPP. This discussion is far from complete; if you want to know more
about PPP, you are urged to read its specification in RFC-1548, as well
as the dozen or so companion RFCs.
At the very bottom of PPP is the High-Level Data Link Control
Protocol, abbreviated HDLC, which defines the boundaries around the individual PPP frames, and
provides a 16-bit checksum. As opposed to the more primitive SLIP
encapsulation, a PPP frame is capable of holding packets from other
protocols than IP, such as Novell's IPX, or Appletalk. PPP achieves
this by adding a protocol field to the basic HDLC frame that
identifies the type of packet is carried by the frame.
LCP, the Link Control Protocol, is used on top of HDLC to negotiate options pertaining to the data link, such as the Maximum Receive Unit (MRU) that states the maximum datagram size one side of the link agrees to receive.
An important step at the configuration stage of a PPP link is client authorization. Although it is not mandatory, it is really a must for dial-up lines. Usually, the called host (the server) asks the client to authorize itself by proving it knows some secret key. If the caller fails to produce the correct secret, the connection is terminated. With PPP, authorization works both ways; that is, the caller may also ask the server to authenticate itself. These authentication procedures are totally independent of each other. There are two protocols for different types of authorization, which we will discuss further below. They are named Password Authentication Protocol, or PAP, and Challenge Handshake Authentication Protocol, or CHAP.
Each network protocol that is routed across the data link, like IP, AppleTalk, etc, is configured dynamically using a corresponding Network Control Protocol (NCP). For instance, to send IP datagrams across the link, both PPPs must first negotiate which IP-address each of them uses. The control protocol used for this is IPCP, the Internet Protocol Control Protocol.
Beside sending standard IP-datagrams across the link, PPP also supports Van-Jacobson header compression of IP-datagrams. This is a technique to shrink the headers of TCP packets to as little as three bytes. It is also used in CSLIP, and is more colloquially referred to as VJ-header compression. The use of compression may be negotiated at startup time through IPCP as well.