Three-wire Connection
Even though the data is transmitted over a 2-wire twisted pair bus, all EIA-485 transceivers interpret the voltage levels of the differential signals with respect to a third common voltage. Without this common reference, a set of transceivers may interpret the differential signals incorrectly. In a typical setup, this third voltage is implied in the power supply common/ground connection. However, fundamentally speaking, there is nothing requiring this common voltage to be the same as the power supply. In fact, certain MS/TP (Master Slave / Token Passing) wiring requires full isolation between the various EIA-485 devices and have to run the third wire for the common connection.
Read more about this topic: RS-485
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