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Digital signals are capable of carrying more information than analogue signals because digital signals make use of the bandwidth more efficiently by closely approximating the original analogue signal. The parts of the signal that do not carry any information are thrown out thus saving the bandwidth from being used needlessly. Also, depending on the coding process, digital signals are much more efficient at filtering out noise than are analogue signals, which do not filter out noise at all thus saving even more bandwidth. The process of approximating the analogue signal in digital signal processing is called quantization.
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