In our illustration, the left-most sample is almost midway between two quantization steps. In cases where a sample falls exactly midway between two quantization steps, there is ambiguity about which step the sample will be assigned, but it is of little consequence, as the quantization error will be the same in either case. For a given amplitude range, the greater the number of quantization steps, the closer any given sample is likely to be to a quantization step, and the smaller the quantization errors that result. In the world of digital audio, the 16 bits used on compact discs provide 65,536 steps, while 20-bit digital audio, as found on most of the digital VTRs that we use, provides 1,048,576 quantization steps. Digital systems are, in the digital domain, free of the broadband noise floor caused by the movement of electrons in conductors and semiconductors.
Quantization errors are the source of the noise introduced in the digital domain.
Although it is often referred to as quantization noise, it is not, strictly speaking, noise. It is program-related and is, therefore, more accurately referred to as quantization distortion. When a sample's amplitude is greater than that represented by the number of bits available, it cannot be quantized in a way that faithfully represents it. It will, in such a case, be assigned the highest quantization step available, although that step is not representative of the sample's actual amplitude. When this happens, of course, the sample's amplitude is distorted.