Most digital communication data is transmitted in a serial form, that is, only one bit at a time. Transmission of data in serial form means each bit is transmitted for only a very short time period. In most systems, the data transmitted requires less than a milli-second. After one bit is sent, the next bit follows; this process is repeated until all the desired bits have been transmitted. This type of system is often referred to as "Time Sharing", because each transmitted signal shares the wires for a short time interval.
Parallel data transmission is a continuous-type of transmission requiring two wires (or one wire and ground) for each bit to be sent. Parallel transmission is so called because each circuit is wired in parallel with respect to the next circuit.
With serial data, one pair of transmitting wires can be used to send enormous amounts of serial data. If the data were sent using the parallel method, then hundreds of wires would be required. Most computer systems use the parallel method to transmit data within them, however if the data must be sent to another system, serial data transmission is used.
An interpretation circuit is required to convert all parallel data to serial-type data prior to transmission. The device for sending serial data is called a "Multiplexer (MUX), and the device for receiving serial data is called a "Demultiplexer" (DEMUX). Figure shows a data transfer system.