Each station passes or repeats the special token frame around the ring to its nearest downstream neighbor. This token-passing process is used to arbitrate access to the shared ring media. Stations that have data frames to transmit must first acquire the token before they can transmit them. Token ring LANs normally use differential Manchester encoding of bits on the LAN media.
Token ring was invented by Olof Söderblom in the late 1960s. It was later licensed to IBM, who popularized the use of token ring LANs in the mid 1980s when it released its IBM token ring architecture based on active multi-station access units (MSAUs or MAUs) and the IBM Structured Cabling System. The Institute of Electrical and Electronics Engineers or IEEE (http://www.ieee.org) later standardized a token ring LAN system as IEEE 802.5 (http://www.ieee802.org/5/).
Token ring LAN speeds of 4Mbps, 16Mbps, 100Mbps and 1Gbps have been standardized by the IEEE 802.5 working group.
Token ring networks had significantly superior performance and reliability compared to early shared-media implementations of Ethernet (IEEE 802.3), and were widely adopted as a higher-performance alternative to shared-media Ethernet.
However, with the development of switched Ethernet, token ring architectures lagged badly behind Ethernet in both performance and reliability. The higher sales of Ethernet allowed economies of scale which drove down prices further, and added a compelling price advantage to its other advantages over token ring.
Token ring networks have since declined in usage and the standards activity has since come to a standstill as switched Ethernet