What are Open Authentication and Shared Key Authentication?

Open Authentication is basically a null authentication algorithm, which means that there is no verification of the user or machine. Open Authentication allows any device that places an authentication request to the access point (AP). Open Authentication uses clear-text transmission to allow a client to associate to an AP. If no encryption is enabled, any device that knows the SSID of the WLAN can gain access into the network. If Wired Equivalent Privacy (WEP) is enabled on the AP, the WEP key becomes a means of access control. A device that does not have the correct WEP key cannot transmit data through the AP even if authentication is successful. Neither can such a device decrypt data that the AP sends.

Shared Key Authentication works similar to Open Authentication with one major difference. When you use Open Authentication with WEP encryption key, the WEP key is used to encrypt and decrypt the data, but is not used in the authentication step. In Shared Key Authentication, WEP encryption is used for authentication. Like Open Authentication, Shared Key Authentication requires the client and the AP to have the same WEP key. The AP that uses Shared Key Authentication sends a challenge text packet to the client. The client uses the locally configured WEP key to encrypt the challenge text and reply with a subsequent authentication request. If the AP can decrypt the authentication request and retrieve the original challenge text, the AP responds with an authentication response that grants access to the client.  

Note that WEP is set on AP and Client. 

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