> Anyway my only doubt now is how much better are differential encoders
> compared to normal ones. I always used normal encoders with no signs of
> noise but since this is for a lathe with 0.01 mm increments I would like to
> go with the safest option.
> 
> As always Andy, thanks you!

The common ground is a problem but it also depends on cable length. Basic 
problem is then there is a flank on one of the signals ground bounce in the 
receiving end. With differential signals ground current stay there it is and it 
will not affect the other signal.

You also need a differential receiver. It is important current at transitions 
are between differential signals and not the ground.


Nicklas Karlsson

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