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The OSI model (Open Systems Interconnet Reference Model) helps us to better understand computer network protocol design. It is something of an abstract representation of network functionality as a series of layers. The layers encompass various protocols that share similar features, and are arranged in layers based on services rendered and received. Each layer provides services to the layer above it, and receives services from the layer below it. Because it is divided into seven different layers, it is often referred to as the OSI 7-Layer Model - not to be confused with seven layer dip. (But if thinking about dip makes it easier to remember, then more power to you.)
We'll consider the seven layers of the OSI model, starting with Layer 1, and how it helps us to have a greater understanding of networking and network protocols, and how they work.
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Layer 1 - The "Physical" Layer
The Physical layer represents the most basic connectivity of devices. A network interface card (NIC) hooked up to a hub (regardless of whether any data is being transmitted) is considered to have "Layer 1 Connectivity". Devices that are considered to be Layer 1 devices are things that only rely on physical connections (as opposed to things that require both physical connection and any form of interpreting protocol). These devices include things like hubs, repeaters, cables, etc. It can also be applied to any type of physical specification, like the number of pins, electrical voltages, cable specifications and ratings, and other very simple and basic components of a network. A smoke signal could be considered a layer 1 function.
The physical layer lays the groundwork for the second layer, providing the service of basic connectivity.
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Layer 2 - The "Data Link" Layer
The Data Link layer provides the basic means necessary to actually transmit and receive data over the physical connections provided by Layer 1. It features protocols that are only concerned with moving data from one point to another. It is hard to describe the Data Link layer, as it is very similar to layer three, but provides crucial protocols that differ from Layer 3 protocols. Some of these are Ethernet standards and Point-to-Point Protocol (PPP). The Data Link layer is sometimes responsible for reporting on and/or solving problems found on the Physical layer. A layer two network device is a Switch, or Bridge. These deal only with MAC addresses (also called physical addresses as they are hard-programmed). The main job of Layer 2 is generating frames from bits for layer three to handle, as well as breaking down frames into bits for layer 1.
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Layer 3 - The "Network" Layer
The Network layer is more aware of the network as a whole, as well as specific endpoints and destinations. It includes protocols such as IP (Internet Protocol) and, therefore, deals mainly with IP addressing and routing of packets (not frames). Unlike layer 2's MAC addresses, layer 3 uses logical addressing. Another layer 3 protocol is ARP (Address Resolution Protocol) which essentially translates IP addresses into MAC addresses. (In reality it doesn't translate, it sends out a broadcast and finds out the MAC address, but in function it might as well be a translation.) RARP (Reverse-ARP) is the same thing, only in reverse. Layer three doesn't concern itself with the integrity of data transmitted, it simply fragments and sends out and route packets, discards ones that are errored, and doesn't care if they ever reach their end destination intact.
Understanding the OSI Model - Data Transmission
The 7-layer OSI Reference model is designed to organize and explain technology and protocols used in networking. The seven layers each have a unique role, and provide services to the layer above it. Using this reference model we can gain a better understanding of how networking works.