Your ears are designed to locate sounds in 3-dimensional space.
They do this by first comparing the sounds received by each ear. Let’s say there’s a sound off to your left. Your left ear will receive this sound sooner than your right ear. The time difference between when the sound arrives gives you a clue that it’s off to the left.
The shape of your ears is also intended to bounce sounds so that the direction they’re coming from – up, down, front, back, etc. – yields different spectral qualities.
Normally, earphones eliminate all this positional information. Each ear has independent sound waves directly projected into it – the sound is coming from directly outside each ear. However, with some signal processing, you can mimic the features your brain uses to localize sound in a 3-d space and make it appear to come from a specific point.
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