Latency is a significant problem with computer-based recording systems. Latency simply means a slight delay between the signal going in, and the same signal coming out. (You need the signal to come out again so that you can monitor it).
Take an example. A guitarist is overdubbing a solo onto the basic tracks of a song, which were recorded previously. The monitoring is set up so that he can hear the basic tracks in his headphones, and can also hear his guitar too. The problem is that the guitar is delayed by anything up to 20 milliseconds. It takes this long to make the trip from input to output.
Twenty milliseconds doesn't sound like much, but even a ten millisecond delay can be intensely distracting. It doesn't sound right to the guitarist, therefore he can't play at his best. It's even worse for singers.
It's worth knowing that only computer recording systems suffer from latency. Analog recorders, even humble cassette recorders, have zero latency. Absolutely none. Digital tape recorders do have a slight latency, but it is small and usually can be switched out so that a signal being recorded passes in the analog domain to the outputs with zero time delay. Some standalone disk recorders have sufficient computer-like qualities to possess latency, unfortunately.
There are three solutions to latency in computer recording.
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Great home recording starts with a great home recording studio. It doesn't need to be expensive if you know how to select the right equipment for your needs.