There is a great deal of confusion and misunderstanding among audiophiles about balanced and unbalanced operation. Most audiophiles feel that balanced operation is better, but they can't tell you why. So let me take this opportunity to explain how the two systems work and describe their advantages and disadvantages.
Naturally it seems sensible to prefer a balanced system. After all, doesn't it seem like a "no-brainer?" Surely a balanced system would be superior to an unbalanced one. Who wants something that is unbalanced?
But the truth is that the term "balanced" is a misnomer. There is actually nothing balanced about a "balanced" system.
So what exactly is a balanced system and how does it compare to an unbalanced one? Simply put, a balanced system is where the signal and the chassis grounds are separated. In an unbalanced system, the two grounds are combined.
What this means is that a balanced system can have better shielding and therefore can be more effective at rejecting external noise fields than an unbalanced system. Balanced systems also can reject certain types of internal noise if this noise is in the form of "common mode."
Specifically, RFI (Radio Frequency Interference) and EMI (Electro Magnetic Interference) are external noise problems that often plague professional applications. Therefore balanced equipment will be required to eliminate the noise.
For example, when I do live recordings in a concert hall, I have to deal with very large amounts of RFI from the multi-thousand watt light dimmers in a concert hall. These light dimmers operate on the principle of pulse-width modulation that causes the dimmers to switch the power to the lights on and off very rapidly (typically 120 times per second). When you switch high power like this, radio frequencies are produced. This can produce "static" in the recording.
The microphones have low output and usually will have long cables connected to them. This makes them very susceptible to RFI. So to eliminate the RFI problem, balancing transformers are used to convert the unbalanced microphone signal to a balanced one for transmission through the cables to the microphone preamplifiers. At the microphone preamplifiers, another transformer will be used to convert the signal back to unbalanced for reasons that I will explain in a moment.
These balancing transformers not only separate the grounds to produce a balanced signal, but they also convert the high impedance of the microphone (typically 50,000 ohms or so) to low impedance (typically 50 ohms). Low impedance not only increases the ability of the system to eliminate the noise, but it also prevents frequency response errors. These would occur due to relatively high capacitance produced by long cables from forming an electronic filter that will roll off the frequency response. So using balanced, low-impedance operation makes it possible to have long cable runs (hundreds of feet) without problems with either noise or frequency response.
There is no free lunch in physics, so you would expect that balanced operation comes with a price. It does indeed. That price is that balanced operation is more complex than unbalanced operation and therefore there are more electronics in the signal path. The additional electronics produce more noise and distortion than you would get from an unbalanced system with similar electronic circuits.
In the case of the microphone preamplifiers in the above example, we want them to be as quiet as possible. If we ran the signal balanced through the preamplifier, we would have at least two input transistors or tubes, and more likely, double the entire preamp electronics.
As a result, the preamp would be twice as noisy as operating it unbalanced. So to eliminate the noise at this critical location in the signal path, it is standard practice to unbalance the signal where it enters the microphone preamplifiers so that there is only one input device used.
Another example of where balanced electronics are necessary is when running long cables from a recording booth to a mixing room. In this case, there are usually many cable channels running together inside a metal conduit. These cables will have audio signals running through them that can induce electrical currents in their neighboring cables. This causes crosstalk, where the signals and sound from nearby cables "bleed" into the ones next to them.
Once again, balanced operation offers superior shielding and this can prevent the crosstalk. Similar problems are present in most professional applications on stage, so balanced operation has become standard for professional use.
Yet another advantage of balanced operation is the ruggedness of the connectors. Professional XLR connectors have locks on them that prevent them from becoming disconnected accidentally. Can you imagine a performer on stage holding a microphone whose cable was held in place by an RCA connector? It wouldn't take much motion on the part of the performer before the cable would become disconnected. This won't happen with a locked XLR connector.
Another advantage of balanced operation is with internally produced hum. If your electronics have a significant amount of hum, this hum will appear on both phases of a balanced system. In other words, the hum will be "common" to both phases.
Since the hum signals are out-of-phase with each other in a balanced system, they will cancel each other out, producing a quiet background. This is known as common mode rejection and does not occur in an unbalanced system because only one phase is used. So any internal hum will be passed through an unbalanced system while it will be rejected in a balanced one.
Now let's examine the use of balanced operation in audiophile systems. To begin, it should be noted that RFI and EMI are almost never a problem in the typical home environment. So there is rarely any need to operate the system balanced to eliminate external noise.
Secondly, audiophile equipment usually is very well designed, so there is no audible hum present in it. Therefore the common mode noise rejection feature of balanced operation will not be needed.
Thirdly, audiophiles generally do not like transformers in the signal path. So audiophile equipment does not use balancing transformers. Instead, the conversions back and forth between balanced and unbalanced operation is done using electronics. This adds noise, which does not occur if transformers are used. But both electronics and transformers produce distortion, which degrades the performance slightly compared to unbalanced operation.
Fourthly, because transformers are not used, the impedance in a balanced audiophile system is not changed to a lower value compared to an unbalanced system. So the cable lengths in an audiophile system will have approximately the same limits regardless of whether the cables are balanced or unbalanced.
In short, the advantages of balanced systems will not be needed or used in most audiophile applications. But balanced operation still causes higher noise and distortion than what you find in the same electronics when run in unbalanced mode.
Now it must be said that the slight increase in noise and distortion caused by balanced operation cannot be heard by the human ear. It requires test equipment like a spectrum analyzer to reveal the difference. But if you don't want to compromise, and you want the most pure sound with the least noise and distortion, unbalanced operation is superior to balanced operation.
XLR connectors are far more bulky and awkward to use than RCA connectors. While XLR connectors are more rugged than RCA connectors and are required in professional applications, RCA connectors are much more compact, easy to use, and more than adequate in home environments.
Despite the penalties and limitations of balanced operation, many audiophiles believe that balanced operation sounds best. How can this be so when it is easily proven that balanced operation has more noise and distortion than unbalanced operation?
The reason is that balanced operation has more gain. Since two phases are used in balanced operation instead of one as in unbalanced operation, balanced operation plays 6 dB louder than unbalanced operation.
Understand that when music is louder, it sounds better to us. Humans can barely hear the loudness difference when music is played 6 dB louder, so most audiophiles will not recognize that when they switch to balanced operation the music is 6 dB louder. Instead they will recognize that it sounds "better" due to the fact that the music is slightly louder.
But the truth is that the music actually sounds the same. If the listener went to the trouble to accurately match levels, he would not hear any difference between balanced and unbalanced operation (even though balanced operation is actually slightly worse).
The most important point I have saved to last. That is that the balanced and unbalanced output of a component simply cannot sound different because the signal is the same regardless of its mode of operation.
Simply put, the signal produced by the component is doubled into two phases in balanced operation, while just one signal is used in unbalanced operation. But since the two signals are actually the same, they cannot sound anything but identical.
So in summary, from a practical standpoint, it really doesn't matter whether you use balanced or unbalanced operation in most home audio systems. Both will sound identical to human hearing even though balanced operation has slightly more distortion and noise.
Personally, I prefer the simplicity and purity of unbalanced operation even though I will freely admit that I cannot hear any difference between the two. I only use balanced operation when I need to eliminate external noise, such as when doing live recording.