Balanced vs Unbalanced Connections

An Unbalanced connection has one signal wire and one ground wire that serves as a voltage level reference and often also as a shield against interference. Any noise induced in the signal wire will appear in the terminating circuit.

A Balanced connection has two signal wires, with the second signal being of opposite polarity (180 degrees out of phase) to the first. Any noise induced in the connection will appear on both signals. At the receiving circuit, the second signal is inverted and added to the first signal. This doubles the level of the signal and subtracts out all the noise.