In terms of webhosting, limiting bandwidth is basically limiting the amount of data that your website is allocated per month. So, lets say you have a download on your website that is 1 MB. Lets also say that you are only allowed 5 GB of bandwidth. So, if this 1 MB file is downloaded about 5000 times, your website will be disabled, unless you buy more bandwidth.
Bandwidth is the amount of data you can use though your account during a given time.
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