The best-known form of distortion is “harmonic distortion,” where the output of an audio signal contains additional components that occur at the natural harmonics of the input. When a device clips, the waveform is generally flattened. Analog devices tend to gently flatten the waveform and produce what we think of as saturation. When a digital device clips, it does so by chopping off the tops of the waveforms abruptly. If this flattening is symmetrical, it produces odd-order harmonic distortion at the third and fifth harmonics. You don’t have to be a rocket scientist to realize this does not sound good at all. Even small amounts will be audible and unpleasant.
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