Tracing is a form of observability that provides a view of how different components in a distributed system work together. It involves collecting timing information on the finer details of a request, using spans and child spans to represent subtasks within a trace. However, past versions of InfluxDB had limitations when it came to handling tracing data due to cardinality issues, which could impact query performance. InfluxDB IOx removes these limits by storing data in a more efficient format, allowing for infinite cardinality and unlocking new use cases such as tracing. The new storage engine and query tier enable fast query performance and scalability, making it possible to handle large volumes of tracing data without sacrificing performance.