I want know why it's said that public WIFI is not safe for banking transactions or entering password for online accounts etc. I want to imitate an attacker and try to harvest as much information as I can from my local wireless network in my home with a couple users. I have a background on working with hacking tools included in Kali linux or Owasp on Microsoft Windows.
In order to imitate a controlled attack and to know how much information can be gathered and how it's done, I'm looking for a way to sniff in my local network and find out what data other devices are transmitting over the network, like passwords, keywords transmitted over the network (HTTP and if possible also HTTPS websites). these are the things that come to my mind when I think about an unsafe public WIFI and what nefarious things an attacker can do to obtain data.
I have a second question regarding this, because I have access to my home wireless router, can I setup a local DNS server on my Windows or Linux (VM) and it work as a relay DNS server (i.e doesn't contain any DNS data, only be used to direct the data being transmitted over the network to my computer so that I can see the data) ? is it possible, and if yes then please point to the right direction and how can it be done. if not, please explain why and what other options do I have for my purpose? or what an attacker with enough motication actually would do in a situation like this?