In designing Ethernet, the same challenges were faced as in designing any other network. But, a number of decisions needed to be made.
1)How to send data across the wire
2)How to identify sending and receiving computers
3)How to identify which computers should use shared cable at a given time
These issues were resolved by using packets for data that contain MAC addresses that are used to identify computers on the network, as well as a process called CSMD/CD to determine which computer should use the wire at a given time.
Organizing the Data Packets
All computer networks divide data transmitted between computers into tiny pieces called packets. The use of packets resolves two issues with Ethernet networks.
1)They prevent any single computer from monopolizing the shared bus cable
2)They make the process of retransmitting lost data more efficient
An example of the first issue would be if a large spreadsheet were being transmitted as an entire piece of data, the sending computer would prevent all the other machines from using the cable my monopolizing the cable. Utilizing packets allows the computers to share the cable by sending fewer pieces of data at a time.
An example of the second issue would be if there was an error during transmission of the spreadsheet. Without packets, the entire spreadsheet would need to be retransmitted. However, when using packets, only the damaged packets would need to be retransmitted because the file would be broken into smaller packets. Because of the benefits of using packets, allowing shared access and data retransmission reduction, virtually all network technology uses packets.