Two such terms in the engineering dictionary are bit rate and baud rate. They are also two of the most confusing terms due to their definitions. They’re both measures of data, and they’re both often used in the same context, making the language trickier than necessary. But there is a simple explanation that can set the issue straight, here’s how…

Defining the Terms
Bit Rate: The number of bits transmitted or received per unit time is considered as the bit rate. Usually, the bit rate is calculated on a per-second basis.

Baud Rate: The modulation rate of data transmission that is expressed as ‘bits per second’ is known as the Baud rate. It is directly related to the gross bit rate that is expressed as bits per second.
If you are a beginner, both these definitions may sound like variations of each other. And that’s where the confusion stems from.

This is one of the things that beginners need to figure out before treading over the more complicated aspects of digital communication.

Understanding Line Coding

In digital communication, the terms data and signal mean different things. When we convert digital data into a digital signal, it is called line coding. Essentially speaking, it is the signal that carries the data. Therefore, data is what is being sent, and a signal is what’s sending it.
Imagine a car with four people in it. Each person is equivalent to a data element: the smallest identifiable unit of data. Four data elements are being transported in a car, which is the carrier. The car is thus the signal, and the people in it the data.

Data Rate and Signal Rate
We can now understand data rate and signal rate as:

Data rate: number of data elements per second
Signal rate: number of signal elements per second
Herein lays the true difference between bit rate and baud rate. The base unit of data rate is bit rate, while the base unit of signal rate is baud rate. Incidentally, baud rate is also known as pulse rate or modulation rate. Measuring bit rate and baud rate are therefore two different ways of looking at the same system of data communication. In our above example, the number of cars that pass you per unit time would be the baud rate, while the number of people (in the cars) that pass you per unit time would be the bit rate.

The Bit
Judging by the definitions of bit rate and baud rate, we can still say that there can be cases where both the counts are the same. For example, if you’re connecting two serial devices together with a direct cable, then bit rate will be the same as baud rate. This in effect brings us to one of the foundational characters in electronics, the “Bit”. Short for ‘binary digit’, the bit is the smallest unit of data in a computer. Therefore, the number of bits transferred will make measurement more accurate than simply measuring the number of signal changes.

It is therefore understood that bit rate is always greater than baud rate for a particular signal. Mathematically, baud rate is calculated using the formula (S=N/r Baud). N is the bit rate, while ‘r’ is the number of data elements that each signal element carries. From that, we can also understand that to attain greater signal efficiency, ‘r’ needs to be as large as possible.

In settling one of the most common confusions in digital communication, we’re one step forward in setting the course towards gaining knowledge about the interesting world of electronics. There are many concepts that require attention before tackling the practical side of it, which we shall soon be doing.
Source:http://electronics.wesrch.com/articles-details/articles-paper-EL1SE1000AAAW-the-easiest-explanation-to-the-difference-between-bit-rate-and-baud-rate

About Arun Prabhu:

Arun Prabhu is a writer with Transparency Market Research – a market intelligence firm based in the United States. His area of expertise includes electronics and semiconductors, a field which he has studied for as an engineer. With his background in the theoretical areas of electronics, he seeks to impart knowledge about the realm of circuits and hopes to learn more while doing so.