Absolute encoder SSI interface and Grey Code

See if this helps http://en.wikipedia.org/wiki/Grey_code

To make it simple Grey code just changes one position at a time.

In binary if you go from 1 (001) to 2 (010) you have to change the 2nd digit to 1 and the end digit to 0.

In grey code only one bit position changes 1 (001) to 2 (011), all that changes is the middle bit.
 
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RSDoran's answer is absolutely correct but he did not explain the reason for using grey code. The answer is simple if you look at his examples. In the first instance (binary) you will see that as the code changes from 1 to 2 the encoder must turn off bit 0 and turn on bit 1. If bit 0 turns off slightly before bit 1 turns on then the output briefly becomes 0. If bit 1 turns on slightly before bit 0 turns off then it briefly becomes 3. With larger numbers these errors can become huge. Grey code only requires one bit to change for each increment so the errors are eliminated.
Andybr
 

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