Networks connect several computers together. The cable created from networks contains several wires for data transmission. Regular network cable does not work where two computers are connected directly together by one cable (and not part of a network). This is because the configuration of the wires within the cable needs to switch from transmit to receive and vice versa. Cables that perform this switch are called crossover cables.
A network cable contains eight wires. Only four of these are used for the network. Two are the positive and negative path of a circuit enabling a computer to transmit data. The other two useful wires are the positive and negative paths of a circuit to receive data. If a standard network cable connects two computers together then each will transmit on the transmit wires, but not listen on those wires to receive data. Thus, the two computers miss each other's messages because they are each transmitting on the same wires and listening on the unused receive wires.
Crossover cable is meant for a short link between two computers, or between two networking devices of the same type. It resolves the problem of both sides using the same channel and ignoring the other, by swapping over the receive and transmit wires in the connector at one end of the cable. Thus one endpoint transmits on the transmit wires which end up on the receive contacts of the other endpoint. The second endpoint sends data down its transmit contacts which connect to the receive wires of the cable. The first computer is listening to these wires and receives the second computer's message.
Networks connect more than just two computers. They need a central splitter to direct data from one computer out to many, or to direct it to one of the many available paths. This job is performed by hubs and switches. These devices are built to receive data from computers, so they listen on the transit circuit and transmit on the receive circuit. This enables the use of regular UTP cable when connecting a computer to one of these devices. However, as a hub transmits on the receive line and listens on the transmit line, two hubs cannot be connected together with a regular cable. That connection needs a crossover cable.
The use of crossover cable is dying out. Many network adapters and network hardware now implement “auto cross.” The network adapter is able to detect which wires are being used to transmit or receive data and then switches over its internal paths accordingly. This means that regular “straight through” cable can be used in all circumstances and crossover cable is not needed.