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Network encryption refers to encrypting data as it travels across the network between the client and server. The reason you should encrypt data at the network level, and not just the database level, is because data can be exposed on the network level. For example, an intruder can use a network packet sniffer to capture information as it travels on the network, and then spool it to a file for malicious use. Encrypting data on the network prevents this sort of activity.
To encrypt data on the network, you need the following components:
An encryption seed. The encryption seed is a random string of up to 256 characters. It generates the cryptographic keys that encrypts data as it travels across the network.
An encryption algorithm. You can specify any of the supported algorithm types: AES, RC4, DES, or 3DES.
Whether the settings apply to a client or server. You must configure the server and each client to which it connects.
How the client or server should processes the encrypted data. The settings you select (you have four options) must complement both server and client.
A mechanism for configuring the encryption. You can use Oracle Net Manager to configure the encryption. Alternatively, you can edit the sqlnet.ora configuration file. Both Oracle Net Manager and the sqlnet.ora file are available in a default Oracle Database installation.