IBM first proposed Token Ring in 1969. At the time, Ethernet was limited to 10 Mbps. Token Ring was capable of supporting 16 Mbps, which helped its popularity. Today, this is no longer an attraction since Ethernet is capable of supporting 100 Mbps (Fast Ethernet). The IEEE later adopted Token Ring as standard 802.5. There is also a Token Bus standard (802.4), which is similar to Token Ring except it uses a bus topology instead of a ring topology.

The principal difference between Token Ring and Ethernet is in the topology and the use of a token. Whereas Ethernet uses a bus topology, Token Ring relies on a ring topology. Many of the same limitations of Ethernet apply to Token Ring, including the fact that only one node on the net work can transmit at a time. Remember that with bus topology, the data is broadcast over the bus (in both directions) by an originating computer. Terminators connected to the ends of the bus absorb the data. In Token Ring networks, the data is handled differently. The originating computer sends the data over the ring to an adjacent computer. The data is read by the adjacent computer, and if the computer determines that the destination address is not its own address, it regenerates the data packet without modification. However, if the destination address is its own, the packet is modified to indicate that it was received and is copied into memory. Then it is sent out onto the ring again,...