Encrypted authentication is a firewall feature that allows users on an external network to authenticate themselves to prove that they are authorized to access resources on the internal network. Encrypted authentication is convenient because it happens at the transport layer between a client software and a firewall, allowing all normal application software to run without hindrance. Source: STREBE, Matthew and PERKINS, Charles, Firewalls 24seven, Sybex 2000, Chapter 1: Understanding Firewalls.