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Common questions are “Is PAUSE equivalent to credits?”, and “Are credits better?”
Credits are used in Fibre Channel to implement lossless behavior. On each link, at link initialization, the number of buffers is pre-agreed, and each link end-point keeps an account of the free buffers. Let us consider the link in Figure 2-3. Switch A is the sender, and it can transmit a frame only if there is at least one free buffer available in switch B. In the case shown in Figure 2-3, there are not free buffers in B, because the buffer-to-buffer (B2B) count is zero, and therefore Switch A has to wait until Switch B sends a R_RDY (Receiver Ready) to switch A, indicating that a buffer has freed up. R_RDY is an ordered set. (That is, a special Fibre Channel transmission word that is transmitted between frames and that indicates the availability of a new buffer.)