What is Line Encoding?

Line Encoding is the method by which analog/digital data is converted into analog/digital electromagnetic signals for transmission via. wired/wireless transmission links. Computer Communication uses both analog and digital signal transmissions, depending on the underlying media.
All four combinations of data/signal line coding techniques are possible and are used in different forms of communication. They are described as points a) to d) in the description below.

Analog Signal Transmission

Analog signals are usually continuously varying electromagnetic signals that may be propagated over a variety of media,  depending on the frequency components of the signal. Analog signals can propagate both analog and digital data.
DIfferent types of modulation techniques are used for converting data into electromagnetic signals. In the modulation techniques, a high frequency carrier wave is modulated by data. If modulation is not used, then it is called as base-band transmission (e.g. POTS)
 a) Analog Data transmitted as Analog Signals
Here analog data is transmitted as an analog signal by altering the properties of a high frequency carrier wave. The high frequency carrier wave’s amplitude or frequency or phase is altered in accordance with the analog data. This process is known as analog modulation. Examples are  human voice transmitted over Plain Old Telephone System (POTS), AM/FM radio transmissions etc. Typically the combination of analog data getting transmitted directly as analog signals is not normally used in computer communications. Instead analog data is first digitized and converted into a binary stream and then transmitted using analog or digital transmission signals.
The figure below illustrates Amplitude modulation, where the shape of a high frequency carrier wave is altered in amplitude in accordance with the amplitude of the analog data.
Analog data modulated over a carrier signal using Amplitude Modulation (AM)

Analog data modulated over a carrier signal using Amplitude Modulation (AM)

b) Digital Data transmitted as Analog Signals 
Here digital data is transmitted as analog electromagnetic signals, by digital modulation techniques like ASK, FSK, PSK etc. E.g. Email, text, digitized voice etc. carried over digital links. This combination of digital data getting transmitted as analog signals is widely used in computer communication. Considering the importance of this in computer communication, more details about the different digital modulation techniques would be given in a separate post.

Digital Signal Transmission

Digital signals are a sequence of voltage pulses that can be transmitted over a medium. They can propagate analog and digital data. They offer better noise immunity, are cheaper to implement in hardware, more secure and also allow data compression, thereby optimally utilizing the transmission link.
c) Analog Data transmitted as Digital Signals
Here analog data is first encoded into binary digital data by devices known as codecs using processes like quantization and companding (e.g. Voice over IP, Skype calls etc.). The digital data is then sent as digital signals by digital line coding techniques like Manchester encoding, AMI etc.
d) Digital Data transmitted as Digital Signals
Here digital data is first encoded into a binary stream. These binary streams are then converted into digital signals by line coding techniques like Manchester encoding, B8ZS etc.
Both types of digital encoding would be covered in detail in a subsequent post.

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