For communication to take place both transmitting and receiving must occur successfully.

• Transmitting involves the sender encoding the message and transmitting it over the medium.
  
• Receiving involves the receiver understanding the organisation of the encoded message – based on the protocols agreed upon during handshaking with the transmitter. 

• The receiver can then decode the message based on the rules of the agreed protocols. 

• Encoding organises the data into a form suitable for transmission along the communication medium.
• Decoding changes the organisation of the received data into a form suitable for subsequent information processes.
• Prior to transmission data is encoded into a signal according to the rules of the transmission protocols being used and suited to the transmission media along which the message will travel. 
• When messages reach their destination the receiver reverses this process by decoding the signal and transforming it back into data.
  
  
• Data that originates or is stored on a computer is always in binary digital form. 
• Digital data is all data that is represented (or could be represented) using whole distinct numbers – in the case of computers a binary representation is used. 
• Continuous data that usually originates from the real world is analog. 
  
  
• Both analog and digital data can be encoded and transmitted on electromagnetic waves. 
• Note that in reality all waves are continuous hence they are analog. 
• For our purpose, it is how we choose to interpret the data carried on these analog waves that we shall use to distinguish between digital signals and analog signals. 
• A digital signal is being used when digital data is encoded onto an analog wave. 
• An analog signal is being used when analog data is encoded onto an analog wave. 
  
  
• To encode analog data into a digital signal requires that the data first be converted into digital using an analog to digital converter (ADC). 
• Similarly to encode digital data into an analog signal the data must be converted to analog data using a digital to analog converter (DAC).