What defines a collision domain in an Ethernet network?

A collision domain is defined as the network area where data packets can collide. In an Ethernet network, all devices within a collision domain share the same bandwidth and compete for it when transmitting data. If two or more devices send packets simultaneously, a collision occurs, which can result in data loss. The devices involved would need to use a protocol, such as Carrier Sense Multiple Access with Collision Detection (CSMA/CD), to manage access and retry transmissions after a collision is detected.

Understanding this concept is crucial for network design and troubleshooting. In a switched network, each port on a switch creates a separate collision domain, which effectively reduces collisions compared to a hub, where all ports operate as a single collision domain. This distinction is vital for improving network efficiency and performance.

The other options relate to different aspects of network functionality but do not accurately define what a collision domain is. For instance, data encryption pertains to security, physical distance describes the spatial relationship between devices, and lacking network access is more about connectivity rather than data transmission interactions.