In data transmission, the binary data is most often sent in a byte (8 bits). In order to incorporate the parity bit system within the transmission the 1st bit is dedicated to informing the receiving system of whether the remaining binary has an even or odd number of 1's within the byte.
This method of error checking is very inefficient however very reliable. The method involves the sending system transmitting 3 identical bits and whatever value (1 or 0) appears the most is treated as the correct bit.
This method of error detection (alike parity bits) requires a bit to be dedicated as the check digit. The binary that represents the data undergoes mathematical operations until the result of the calculation matches the check digit