A widespread networking scheme most commonly known as "the hardware device that enables the LAN to work at the office." Ethernet was originally developed by Xerox PARC and further developed by DEC and Intel. Now it is recognised as the industry standard.

Data is broken into packets and each one is transmitted using the CSMA/CD algorithm until it arrives at the destination without colliding with any other packet. The first contention slot after a transmission is reserved for an acknowledge packet. A node is either transmitting or receiving at any instant. The bandwidth is about 10 Mbit/s. Disk-Ethernet-Disk transfer rate with TCP/IP is typically 30 kilobyte per second.

Version 2 specifies that collision detect of the transceiver must be activated during the inter-packet gap and that when transmission finishes, the differential transmit lines are driven to 0V (half step). It also specifies some network management functions such as reporting collisions, retries and deferrals.

Ethernet cables are classified as "XbaseY", e.g. 10base5, where X is the data rate in Mbps, "base" means "baseband" (as opposed to radio frequency) and Y is the category of cabling. The original cable was 10base5 ("full spec"), others are 10base2 ("thinnet") and 10baseT ("twisted pair"). A newer version of Ethernet, called 100Base-T (or Fast Ethernet), supports data transfer rates of 100 Mbps. And the newest version, Gigabit Ethernet supports data rates of 1 gigabit (1,000 megabits) per second.