A worm is a self-replicating computer program. It uses a network to send copies of itself to other computers on the network and it may do so without any user intervention. Unlike a virus, it does not need to attach itself to an existing program and does not need to be transferred as part of a host to spread themselves; in other words, it doesn’t require a program to execute in order for them to spread themselves. Worms are designed to take advantage of security vulnerabilities so that they can automatically spread themselves from one computer to another. For instance when there is a vulnerability identified in any system, the programmer designs the worm to take advantage of that vulnerability and to duplicate itself so that it may spread.
In addition to replication, a worm may be designed to do any number of things, such as delete files on a host system or send documents via email. More recent worms may be multi-headed and carry other executables as a payload. However, even in the absence of such a payload, a worm can wreak havoc just with the network traffic generated by its reproduction.
The problem with worms is that administrators and computer users do not act fast enough to apply patches/fixes that address those security holes and so they're system are left in the open. Users usually discover the vulnerability when it is too late.
One of the negative side effects arising from worms is the amount of traffic they generate, when hundreds and thousands of computers are compromised a slew of information is sent back and forth as the worm I scanning for other victims and running its payload.
An example of a recent worm is the Conficker worm which has caused a great deal of trouble with computer systems around the world (see 5 Most Infectious Computer Viruses Ever) other known worms include the Morris Worm and the MyDoom worm.
source: freetechexams
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