More accurately, conversion of signal format from an electrical form to an optical form (or vice versa). With a digital signal, it would be possible for a few bits to get lost along the way. Those lost bits should be effectively inaudible (after all, there's inevitably a little data loss anyway, but it is handled by error correction during D/A conversion). Unless the optical-to-coax converter is very poorly implemented, there should not be any measureable degradation of the analog signal produced at the receiver or pre/pro.

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