The fundamentals of creating a VPN are Authentication, strong Encryption and a method of secure Key Exchange. Authenticate the users, securely exchange keys for encryption then encrypt the data using the generated keys.
Authentication is used to validate a users identity using one or more of a number of methods: Something you have – can be a key card, a security pass, drivers licence, a passport or similar. The possession of one of the above items is usually enough to confirm the identity of the holder. The problem with this is that the device can be lost or stolen, and sometimes used by other persons.