The travelling edge
The driver chip flips its output from 0 to 1 and back, very fast. That sends a short pulse of voltage onto a copper trace, a flat wire printed on the circuit board.
The pulse is not everywhere at once: it travels. On a circuit board it moves at about half the speed of light, roughly 15 cm every nanosecond. When fast edges meet long traces, the trace acts like a transmission line.
The trace and the copper ground plane under it work as a pair. To a travelling edge they look like a resistance called the characteristic impedance, Z0, here 50 ohms. The trace width, its height and the board material set it.
Reflections
The receiver's input is almost an open end, far more than 50 ohms. Wherever the impedance suddenly changes, the wave cannot simply carry on, so part of it bounces back as an echo. Here nearly all of it returns.
The echo also bounces off the driver, flipped upside down, and comes back again. So the receiver sees the pulse overshoot, rising too high, then smaller swings of both signs. That is ringing: a 0 can briefly look like a 1.
Fix it with a termination resistor equal to Z0: 50 ohms from the end of the trace to ground. Now the line looks endless. The pulse flows into the resistor, turns into a little heat, and nothing comes back.
Noise
Traces side by side are coupled by their electric and magnetic fields. Each fast edge on one pushes a small, unwanted ghost onto its neighbour, and it grows along the shared run. More spacing and a solid ground plane keep it small.
When several outputs switch at once, their currents all return through the chip's ground pin. The pin has a little inductance, which fights sudden changes, so the chip's own ground jumps for a moment. That jump is ground bounce.
Clean links
A differential pair sends each bit on two traces as opposite pulses. The receiver reads only the difference, so noise that lands on both equally cancels out. USB and PCI Express use pairs; USB 2.0 pairs are 90 ohms.
An eye diagram stacks many bits on top of each other on a scope. A wide-open eye means the receiver can easily tell 1 from 0. Echoes close the left eye; the terminated line keeps the right eye open.
In detail
;; step 1/10 · edge Driver output: 0 V -> 1.0 V -> 0 V (a pulse) The glowing shape standing on the trace is the voltage at each point: taller = more volts. Its edges are the fast changes that cause trouble.
The line is a teaching model: lossless, with a 10 Ω driver, a 1.0 V swing and an ideal open receiver input. Real chips clamp very large overshoots, and real lines also lose some signal along the way. Signal speed: light travels about 12 inches per nanosecond in air; in FR-4 board material (Dk about 4) it is about 6 in/ns, roughly 15 cm/ns (E. Bogatin, Rule of Thumb #3). Reflection coefficient Γ = (ZL − Z0)/(ZL + Z0): +1 for an open end, 0 for a matched load, negative for a load below Z0 (UC Berkeley EECS 117).