Security is an important topic in Hadoop cluster. There are several approaches for securing a Hadoop cluster, but all the approaches end up with what type of requirement is there and based of the requirements security aspects can be decided.
Hadoop Kerberos-based authentication is currently getting used widely. This is
commonly referred to as Hadoop Security. When Hadoop Security is enabled it requires users to authenticate (using Kerberos) in order to read and write data in HDFS or to submit and manage MapReduce jobs and all Hadoop services authenticate with each other using Kerberos.
While Hadoop Security provides Kerberos authentication, it does not protect data as it travels through the network. If your Hadoop cluster holds sensitive information (financial data, credit card transactions, healthcare information, etc.), it may be required to ensure that data is also protected while in
transit through the network (to avoid eavesdropping and man-in-the-middle attacks). This is not different from accessing your bank’s website using a secure connection (using HTTPS) when you connect to it. To address these kinds of use cases, network encryption was added to Hadoop and can be used.
This link will be helpful to understand network encryption on Hadoop cluster.
http://blog.cloudera.com/blog/2013/03/how-to-set-up-a-hadoop-cluster-with-network-encryption/