In a traditional LAN, several users would all share
the same port on a network device and would
compete for resources (bandwidth). The main limitation
of such a setup is that only one device can
transmit at a time. Segments that share resources
in this manner are called collision domains,
because if two or more devices transmit at the
same time, the information “collides,” and both
end points must resend their information (at different
times). Typically the devices both wait a random
amount of time before attempting to retransmit.
This method works well for a small number of
users on a segment, each having relatively low
bandwidth requirements. As the number of users
increases, the efficiency of collision domains
decreases sharply, to the point where overhead traffic
(management and control) clogs the network.