MLT-3 encodes a bit as presence or lack of transition, exactly as in NRZI. What makes MLT-3 different is that the base waveform is a 3-state alternating wave. Rather than alternating between 0 and 1 as in Manchester encoding and NRZI, MLT-3 alternates from -1 to 0 to +1, back to 0, then back to -1, repeating indefinitely. A zero is encoded as a halt in the back-and-forth progression. It may be useful to think of MLT-3 as a stop-and-go sine wave, encoding 0 as stop and 1 as go. Using MLT-3, it is therefore possible to represent four or more bits with every complete waveform, at 0, +1, 0, and -1.
For a discussion of the reasoning behind the association of four byte "nibbles" with five byte codes, refer back to the DATA ENCODING SECTION of this Fast
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