Digital audio formats are methods of encoding sound into a digital file, allowing it to be stored, transmitted, and played back on various devices. Common formats include MP3, WAV, and AAC. Each format has its own characteristics, such as file size and sound quality, making them suitable for different uses, like streaming or professional audio production. These formats use different compression techniques to reduce file size while maintaining audio quality. For example, MP3 compresses audio by removing some sound data, which can lead to a loss in quality, while WAV retains all audio information, resulting in larger files.