Difference between Analog and Digital circuits

Analog Circuits Digital Circuits
These circuits operate on continuous valued signals(commonly referred to  as analog signals).                     These circuits operate on signals that exist only at two levels i.e. 0's and 1's (binary number system).
Analog circuits are difficult to design since each component has to be placed by hand as automation techniques for designing these circuits fail to do the job efficiently.On the other hand digital circuits are easy to design since automation technique can be applied at various levels of circuit design. This involves minimum human interaction.
No conversion of input signals are required before processing i.e. input signal is analog, the circuit directly performs various logical operations and produces an analog output.In digital circuits, the input signals are converted from analog to digital form before it is processed, i.e. the digital circuit is capable of processing digital signals only, and produces output which is again converted back from digital to analog signals so that the output gives meaning full results that can be understood by humans.
In analog circuits, since there are no conversions involved at the input or at the output side there is no loss of information that is available for processing.Due to the conversion process at the input side(analog to digital) and at the output side, some amount of information is lost during the conversion process.
The man power available to design analog circuits is very low, this results in long time to market the finished products. The available man power to design digital circuits is significantly large compared to that of analog circuit designers.
Analog circuits are mostly custom made and lacks flexibility. Digital circuits have high degree of flexibility.

Note: Even though digital electronics has taken over analog electronics, We still cannot eliminate analog electronics because of the fact that in real world we use only analog signals  i.e. humans can understand only analog signals (not 0's and 1's).
Can you imagine talking to your friend in terms of 0's and 1's (sounds funny).
So all the digital circuits that are designed in order to interact with the real world, the digital circuits must have an analog interface.

A simple example would be your computer keyboard
Each time you type something on the keyboard, you see the corresponding key on the monitor. What happens under your keyboard is: As soon as you type a key a set a 0's and 1's are sent to the processing unit which is in turn given to the monitor which can understand only 0's and 1's the monitor then displays the set of 0's and 1's in form you can understand (English).

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