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If we short circuit RX, TX of Serial port we can detect it by echos. Then we can detect whether Serial port is short circuited or not. Using that phenomenon I can create simple serial socket with those pins connected. Then I can see whether that socket is connected or not. That means we receive one bit of external data without any active circuit. Similarly, how can I use an Ethernet port? What about connecting RX wires to TX wires?

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    Two bits? Surely that's only one. Just in passing, devices that do this kind of thing usually use the handshake lines as general-purpose IO. Outside of a lab, I've only ever seen UPS which use this. – jonathanjo Nov 16 '17 at 8:46
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Yes, there are ethernet loopbacks that connect the Tx and Rx pairs (more difficult on 1000BASE-T because it uses all four pairs for both Tx and Rx), and this may be configured at layer-1 or layer-2 on some ethernet interfaces. Ethernet devices usually detect a loopback, and some interfaces will display errors when keepalives are looped back.

Also, you must remember that ethernet runs on different media, so you must have the correct type of loopback for the medium you are testing.

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