This article is from the Audio Professional FAQ, by with numerous contributions by Gabe M. Wiener others.
Analog recorders are operated such that the signal maintains a nominal
level that strikes a good balance between signal-to-noise ratio and
headroom. Further, since analog distorts very gently, you often can
exceed your headroom in little bits and not really notice it.
Digital is not nearly as forgiving. Since digital represents audio as
numerical values, higher levels will eventually force you to run out
of numbers. As a result, there is an absolute ceiling as to how hot
you can record. If you record analog and have a nominal 12 dB of
headroom, you'll probably be okay if you have one 15 dB transient that
lasts for 1/10th of a second. The record amps _might_ overload, the
tape _might_ saturate, but you'll probably be fine. In a digital
system, those same 3 dB of overshoot would cause you to clip hard. It
would not be subtle or forgiving. You would hear a definite snap as
you ran out of room and chopped the top of your waveform off.
The reality is that digital has NO HEADROOM, because there is no
margin for overshoot. You simply must make sure that the entire
dynamic range of the signal fits within the limits of the dynamic
range of your recorder, without exception. The only meaningful
absolute on a digital recorder, therefore, is the point at which you
will go into overload. The result is the metering system we now have.
0 dB represents digital ceiling, or full-scale. The negative numbers
on the scale represents your current level relative to the ceiling.
Thus, to return to our example, if you have a transient with 15dB of
overshoot past your nominal level, you must then place your nominal
level at a maximum of -15 dB. 0 dB on the meters is the absolute limit
of what you can record. [Gabe]
 
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