Long time ago I heard from friend that on really short distance using optical links makes no much sense because comparing to passive connection optical interfaces introduce another layer of hardware converting electrical signal to light.

Considering 0.5m 10g passive DAC vs 0.5m 10g AOC - which one provides lower latency if any?

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The difference here is incredibly trivial - literally on the order of single-digit nanoseconds. The amount of time it takes to get the packet organized and across the switch is likely 2- to 3- orders of magnitude higher (and you're still in microseconds at that point) - and that's before you consider how long a host takes to actually receive, decode and process the packet.

To accurately measure the differences here would require some very specialized equipment (read: hundreds of thousands of dollars) but, yes, a .5M passive twinax cable has less propagation delay than a 10M AOC.

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