Final answer:
Kerberos is the protocol designed to operate on untrusted networks, securely encrypting authentication traffic by default to prevent sensitive data interception.
Step-by-step explanation:
The protocol designed to run on untrusted networks and encrypts authentication traffic by default is known as Kerberos. It is a network authentication protocol that uses strong cryptography to ensure that user credentials are not transmitted over the network in plain text. Kerberos operates on the basis of 'tickets' to allow nodes communicating over a non-secure network to prove their identity to one another in a secure manner.
Its use is prevalent in various types of networks, but it is particularly important in securing Local Area Networks (LANs) where it helps prevent intruders from intercepting sensitive data. Kerberos is implemented in various operating systems, including Microsoft Windows domains, Apple's MacOS, and numerous Unix-like operating systems, to provide secure authentication mechanisms.