Pulse code modulation offers numerous advantages as a data transmission system and it's widely used in a variety of applications, notably in digital audio and video recording and broadcast technologies. PCM translates binary data -- a sequence of ones and zeroes -- into pulses of transmitted energy; a pulse with a positive amplitude corresponds to one, while a negative amplitude pulse corresponds to zero.
The PCM signal is a digital waveform, which is less susceptible to interference and noise than analog signals. This is because digital waveforms don't have to reproduce data exactly as it is transmitted. A transmitted pulse that is close enough to the expected value of a binary "one" is reliably reproduced into an actual binary "one". Low noise susceptibility allows PCM signals to transmit farther than analog signals without signal degradation, information loss and distortion.
Repeater stations placed along the line of transmission receive, decode and retransmit PCM data and this allows signals to travel long distances without data corruption. The signal is completely regenerated by each repeater so there's no degradation over long distances and multiple retransmissions.
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Computer hard drives, flash drives and CD or DVD discs easily store and retrieve PCM digital data. For example, the audio portion of a DVD movie is encoded using PCM with a sampling rate as high as 96 KHz. This PCM stream is piped directly to an amplifier using a digital audio cable, where it is then decoded into an audible signal.
Encoding a PCM modulates the signal in such a way that only a specific decoder can make sense of the underlying data. This is useful when transmitting sensitive or secure data. The system works because the transmitter and receiver both have circuitry that is analogous to a dictionary, with each circuit mapping the binary pulse-codes to their known definitions. Anyone who intercepts the PCM signal sees only meaningless binary data.