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Latency is a fundamental concept in computing and networking that refers to the time delay between a cause and its effect. In the context of data transmission, it is the time it takes for a packet of data to travel from its source to its destination. This delay can be influenced by various factors, including the physical distance between the sender and receiver, the speed of the transmission medium, the processing time at intermediate network devices like routers, and the congestion on the network.

High latency can significantly impact the user experience, particularly in applications that require real-time interaction. For example, in online gaming, high latency can lead to lag, making the game unresponsive and frustrating. In video conferencing, it can cause audio and video to be out of sync. Similarly, in financial trading, even small delays can result in missed opportunities.

Minimizing latency is a key goal in network design and optimization. Techniques such as reducing the number of hops a data packet must traverse, using faster network hardware, and employing efficient routing protocols can all help to decrease latency. Content Delivery Networks (CDNs) also play a role by caching data closer to users, thereby reducing the physical distance data needs to travel. Understanding and managing latency is crucial for ensuring the smooth and efficient operation of many modern technologies.