Edge computing refers to the decentralization of data processing by shifting it closer to the source of data generation. Instead of relying on a centralized data center, edge computing processes data locally or at edge devices like IoT sensors. This reduces latency and enhances the efficiency of data handling, enabling faster response times for applications like real-time analytics and streaming. Additionally, it minimizes the amount of data that must be sent to the cloud, which can lower bandwidth costs and improve security by reducing potential vulnerabilities associated with transmitting sensitive data over the internet.