Ethernet is based on the principles of collision detection and transmission rescheduling. Once a packet transmission is started, if interference with other packets is detected, a transmission is aborted and rescheduled by its source station. Stations generate random retransmission intervals to avoid repeated collisions.
Several parameters are important when implementing an Ethernet network. The minimum packet size is the least number of bits that can be transmitted as one chunk. The maximum cable length is the maximum length of cable allowed between any two points on the network. The slot time is the minimum time it takes to detect a collision, the time it takes for the signal to propagate from one end of the cable to the other. The slot size is the number of bytes that can be transmitted in one slot time. The bandwidth specifies how fast a station can transmit bits.
We would like the bandwidth to be as high as possible, so we can get our data as fast as possible. As the bandwidth increases, the sender transmits a packet faster. As a result, if the same packet sizes and cable lengths are maintained, then a station may transmit a packet too fast and not detect a collision at the other end of the cable. So, one of two things has to be done: (i) Keep the maximum cable length and increase the slot time (and therefore, minimum packet size) OR (ii) keep the slot time the same and decrease the maximum cable length OR both.
In Ethernet, the minimum packet size is 64 bytes. The slot size is also 64 bytes. The maximum cable length is 2.5 km. Fast Ethernet is ten times faster than Ethernet. Fast Ethernet has the same minimum packet size and slot time, but the maximum cable length is reduced to 100m.
Since Gigabit Ethernet is ten times faster than Fast Ethernet, to maintain the same slot time the maximum cable length would have to be reduced to 10m, which is too short for practical use. Instead, Gigabit Ethernet uses a bigger slot size of 512 bytes. To maintain compatibility with Ethernet, the minimum packet size is not increased. Instead, packets shorter than 512 bytes are padded with extension symbols. This process is called Carrier Extension. Carrier Extension is a simple solution, but it can waste bandwidth for small packets. A technique called Packet Bursting can improve the throughput of small packets.
These scaling problems are caused by the fundamental fact that the speed of light is finite. As we push for higher bandwidth connections, we must deal with the fact that a signal on a wire can only travel so fast. There is nothing we can do about this, except to engineer around it.