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From Citizendium, the Citizens' Compendium

Latency generally refers to a period of time in a delay. It has specific meanings in several scientific fields. In engineering, latency refers to a delay imposed by a process, such as digital-analog conversion, or propagation through a wire or bus. It is another way of saying how long something takes to complete. The term is commonly used in computers. It is measured either in absolute time, or relative to processor or bus cycles. In medicine, latency can refer to the time of incubation for a virus, or the time it takes for a drug to take effect.

Examples of Latency in Computer Networking

One example of the effects of latency is the time delay introduced when data is transmitted over a satellite link. Let's say someone was on the far end of a satellite link, on an island in the Pacific for example. If they were to ping "the mainland" from their location a 600 millisecond delay is automatically introduced, because it takes time for the microwave signal from their ground station to travel all the way up to the satellite in space and back down to the mainland. This delay is based on the fact that the signal is traveling at the speed of light.