Most communications circuits perform functions described in the physical and data link layer of the OSI Model. There are two general strategies for communicating over a physical circuit: Asynchronous and Synchronous. Each has it's advantages and disadvantages.
ASYNCHRONOUS
Asynchronous communication utilizes a transmitter, a receiver and a wire without coordination about the timing of individual bits. There is no coordination between the two end points on just how long the transmiter leaves the signal at a certain level to represent a single digital bit. Each device uses a clock to measure out the 'length' of a bit. The transmitting device simply transmits. The receiving device has to look at the incoming signal and figure out what it is receiving and coordinate and retime its clock to match the incoming signal.
Sending data encoded into your signal requires that the sender and receiver are both using the same enconding/decoding method, and know where to look in the signal to find data. Asynchronous systems do not send separate information to indicate the encoding or clocking information. The receiver must decide the clocking of the signal on it's own. This means that the receiver must decide where to look in the signal stream to find ones and zeroes, and decide for itself where each individual bit stops and starts. This information is not in the data in the signal sent from transmitting unit.
When the receiver of a signal carrying information has to derive how that signal is organized without consulting the transmitting device, it is called asynchronous communication. In short, the two ends do not always negotiate or work out the connection parameters before communicating. Asynchronous communication is more efficient when there is low loss and low error rates over the transmission medium because data is not retransmitted and no time is spent setting negotiating the connection parameters at the beginning of transmission. Asynchronous systems just transmit and let the far end station figure it out. Asynchronous is sometimes called "best effort" transmission because one side simply transmits, and the other does it's best to receive.
EXAMPLES:
Asynchronous communication is used on RS-232 based
serial devices such as on an IBM-compatible computer's COM 1,
2, 3, 4 ports. Asynchronous Transfer Mode (ATM) also uses this
means of communication. Your PS2 ports on your computer also
use serial communication. This is the method is also used to communicate
with an external modem.
Asynchronous communication is also used for things like your
computer's keyboard and mouse.
Think of asynchronous as a faster means of connecting, but
less reliable.
SYNCHRONOUS
Synchronous systems negotiate the communication parameters at the data link layer before communication begins. Basic synchronous systems will synchronize both clocks before transmission begins, and reset their numeric counters for errors etc. More advanced systems may negotiate things like error correction and compression.
It is possible to have both sides try to synchronize the connection at the same time. Usually, there is a process to decide which end should be in control. Both sides can go through a lengthy negotiation cycle where they exchange communications parameters and status information. Once a connection is established, the transmitter sends out a signal, and the receiver sends back data regarding that transmission, and what it received. This connection negotiation process takes longer on low error-rate lines, but is highly efficient in systems where the transmission medium itself (an electric wire, radio signal or laser beam) is not particularly reliable.