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Shure's SM58, An iconic dynamic microphone

Audio can be generally thought of as a signal passing from an input, through equipment, to an output. Inputs can range from music off a cellphone, to a standard microphone; While outputs can range from physical speakers to recording and transmitting devices. In any audio system, the inputs pass through equipment, towards the output, even if that equipment is the input or output device itself. Audio is often processed through devices that can modify the signal for technical, or artistic reasons. A few such devices would be Analog Consoles, Digital Consoles, and Digital System Processors or DSP's.

Getting Audio Into Your System

At the basic level, audio is generally brought into the system via some form of Microphone. During system setup, these inputs will be attenuated (volume raised or lowered) to produce the highest Signal to Noise Ratio possible, without clipping the input (reaching the amplitude limit). Attenuating your inputs from the source is the first step to proper gain staging, which will aid in mixing later. Some microphones have attenuation settings on the microphone itself, while some will need to either be tweaked further up the signal chain, or physically moved to capture more signal. After the mic, comes the cable to connect to the next link in the chain. XLR is perhaps the most prolific cable type to do this, and works by carrying 3 conductors. The first conductor is simply a ground, but the other two are the signal from the microphone, inverse of each other. This can become important in longer runs, as long runs of conductor can often pick up noise from their environment (radio signals and such). At the receiving end of the signal, these two signals can be combined to find the noise that was picked up by the cable, which can then be removed. Generally at this stage, your signal enters a processor or console of some kind. These devices can do things such as limit certain frequencies (Equalization), compress or expand dynamic range (compressors), and mix multiple signals together into one. From there the signal can go back into an XLR cable, or other audio transport method to the drivers that reproduce the sound, or to a recording device which writes that data to a file.