External based time reference is better
The use of NTP or Network Time Protocol has solved the major problem of time overrun among the computers of a network due to the differences of time among the computers due to their faulty or not so precision internal clocks. So for all major transactions among the network especially for the ones having financial transactions it is not at all possible to depend on the internal clocks. The NTP which has the reference with some internal clock or some other clock can serve the purpose of synchronizing the time among the computers.
Network Time Protocol (NTP) is a networking protocol for clock synchronization between computer systems over packet-switched, variable-latency data networks. NTP is one of the oldest Internet protocols in use. NTP was originally designed by David L. Mills of the University of Delaware, who still develops and maintains it with a team of volunteers.
NTP is intended to synchronize all participating computers to within a few milliseconds of Coordinated Universal Time (UTC). It uses a modified version of Marzullo’s algorithm to select accurate time servers and is designed to mitigate the effects of variable network latency. NTP can usually maintain time to within tens of milliseconds over the public Internet, and can achieve better than one millisecond accuracy in local area networks under ideal conditions. Asymmetric routes and network congestion can cause errors of 100 ms or more.
The importance of absolute reference
But for some organization such as the air lines or the stock exchanges etc it is not possible to depend even on the relative time references. In such very important categories it is strictly suggested to have the absolute reference of atomic clock which has an accuracy level of one second in 1.4 million years. Though the atomic clocks are very expensive and cannot be approached easily yet it is possible to have the reference of the Universal Coordinated Time which is relayed by the atomic clock. The NTP can have this absolute reference of time by utilizing the global positioning system or specialist radio transmission facilities.
The protocol is usually described in terms of a client-server model, but can as easily be used in peer-to-peer relationships where both peers consider the other to be a potential time source. Implementations send and receive time stamps using the User Datagram Protocol (UDP) on port number 123. They can also use broadcasting or multicasting, where clients passively listen to time updates after an initial round-trip calibrating exchange.NTP supplies a warning of any impending leap second adjustment, but no information about local time zones or daylight saving time is transmitted.
It is true that for many activities of the computer network the relative time reference can be considered as adequate but the reference to the absolute time frame of UTC cannot have any substitute as regards to the precision. The reference to the UTC will make the time synchronization with the rest of the world. The UTC time reference also ensures that the transactions are free from any fraud, data loss or legal issues. So the organizations which are dealing with sensible transactions, not providing time server with absolute reference may be vulnerable and incur loss of credibility.