Claude Shannon founded the information and coding theory in 1948. This theory nowadays is the basis for understanding reliable digital transmission. Data sources as well as the transmission channels are stochastically modeled. The maximum code rate for reliable communication was defined.

We distinguish according to Shannon two types of coding:

Source coding:
The messages are compressed in the transmitter side, such that the recovery is possible in the receiver side.

Channel coding:
Redundancy is added to the information in the transmitter side, such that the receiver can correct errors due to transmission over a noisy channel. Thus reliable communication is possible between the transmitter and receiver.