The significant difference between a hub and a Layer 2 LAN switch lies in how they handle network traffic and collision domains. A hub operates at the physical layer (Layer 1) and broadcasts incoming data to all connected devices, extending the collision domain across all ports. This means all devices share the same collision domain, which leads to data collisions when multiple devices send data simultaneously. In contrast, a Layer 2 LAN switch operates at the data link layer (Layer 2) and intelligently forwards data only to the intended recipient based on MAC addresses. Each port on a switch represents its own collision domain, effectively dividing collision domains and reducing the chances of collisions. Switches improve network efficiency, reduce unnecessary traffic, and provide better security by sending data only to the specific device it is meant for. In summary:

• Hub extends a single collision domain.
• Layer 2 switch divides collision domains per port.
• Hub broadcasts data to all ports.
• Layer 2 switch sends data only to the destination port.

This makes Layer 2 LAN switches much more efficient and suitable for modern networks compared to hubs.