NTP (Network Time Protocol) uses a single time reference to synchronise all machines on the network to that time. This time reference can be either relative (the server’s internal clock or the time on a wristwatch perhaps) or absolute such as an atomic clock that relays time that is as accurate as humanely possible.
For closed computer networks, a relative time source will function adequately enough, however, if communication with another network or transactions over the Internet is required then it is important that the networks are synchronised to the same time otherwise the above mentioned problems can occur.
But how do you know what time another network is running? Coordinated Universal Time (UTC) is a global time scale, developed to enable computer networks all over the world to synchronise to the exact same time.
UTC arose after the development of atomic clocks. Atomic clocks use the resonance of an atom (normally caesium which resonates at 9,192,631,770 every second) to maintain time. As this resonance never changes, atomic clocks can maintain time for millions of years without losing a second.
Unfortunately, atomic clocks are highly expensive and are normally only found in large-scale physics laboratories. However, the time told by these machines is readily available to synchronise to from several sources. The easiest method is to use a dedicated NTP time server that receives a time signal from either the GPS network or a specialist national radio broadcast.