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TOSLINK (or Optical Cables) are a fibre optic connection system. Most commonly used with audio equipment (via a "digital optical" socket,) where it carries a digital audio stream between devices to an AV receiver that can decode the stream of audio and output it through a set of loudspeakers.
A number of our Raspberry Pi Audio HATs such as the HiFiBerry Digi2 Pro use a TOSLINK connection to pass HQ audio output to a receiver.
Since TOSLINK uses a fibre-optic cable, it is free from distortion caused by electrical or magnetic interference that an electrical cable would incur. The result is an audio signal that is purer, as well as being truer to the original recording. Gold plating is used on the connectors for its anti-corrosive properties.