Serial Line Interface Protocol (SLIP) is used for dial-up connections. It is a protocol that supports TCP/IP over serial communications lines where routers and gateways are not used. If you are using a modem and need to send IP packets over a dial-up line, the transmission will not work because you must connect to another modem, and, of course, modems do not understand IP.

SLIP encapsulates the IP information or information from layers above IP and transmits it over a serial line. Addressing is not used during this part of the connection because a serial line is a point-to-point dial-up communications link. When it is received on the other end, the SLIP data unit is deleted, and the IP data unit can then be sent over a conventional TCP/IP network. The termination point for SLIP connections is usually a gateway computer.

Point-to-Point Protocol (PPP) is a newer version of SLIP that provides faster, more efficient communications. PPP uses a frame format such as High-level Data Link Control (HDLC), with an information field containing the IP header. PPP uses another protocol, the Link Control Protocol (LCP), to establish a connection between either end. Once the connection has been established by LCP, the PPP transmission can begin.

LCP negotiates with the gateway for link configuration, quality of service, network layer configuration, and link termination. The protocol residing in the PPP data unit is identified by LCP at the time of negotiation.