Ethernet Addressing/Routing

Each machine has 1 (or more) network adapter, that has an address, called 'MAC address'. The address is hardwired to the network adapter by the manufacturer. 

Every transmission in an Ethernet network is actually a message broadcast, sent to all machines connected to the shared media. The network adapter checks which address the data is meant to, and only picks up packets containing its own address, or the broadcast address.

Due to this media sharing, collisions may occur (if two machines try to transmit data at the same time) that cause time loss. Thus, Ethernet networks are inefficient when overloaded.