Edge computing refers to the processing of data closer to the source, such as IoT devices, rather than relying solely on centralized cloud computing. This approach reduces latency, improves response times, and decreases bandwidth usage by handling data locally. While cloud computing centralizes data storage and processing, edge computing allows for real-time analytics and action directly at the device level. This is particularly advantageous in scenarios requiring immediate processing, such as autonomous vehicles or smart manufacturing, where delays can significantly impact performance and safety.