To be honest, I've never seen the point of having encryption on the
node-node links. The reason being that as these devices are essentially
providing an internet connection, which is insecure itself. As you
point out, the solution is to use encrypted application protocols.
Saying all that, my personal preference if we do wish to provide
encryption on the node-node links would be to use openvpn, which is
essentially a VPN using OpenSSL. It also removes all the problems with
IPSEC by being an application level VPN, and is much much easier to
setup. I've been using OpenVPN for my personal VPN, and my work
connection to our datacentre for quite a while, and it works really well.
The nodes should also be able to handle OpenVPN encryption without too
much issue, as they can quite easily handle HTTPS already.
I think the biggest hurdle we have right now is providing authentication
on the nodes.
Cheers,
Richie