At the core, both coaxial and toslink were just transport mediums for the same SPDIF bitstream. One used copper, and the other used bendy plastic fiber optics.
And yeah: Toslink was more-limited on bandwidth, by specification.
And one would think that this would be because the optics are not so good (they're definitely not so great), or something.
But then: Alesis showed up with ADAT, and ADAT's Lightpipe could send 8 channels of 24-bit 48KHz audio over one bog-standard Toslink.
They used different encoding, of course. Even at a very low level, rather than detecting a rising edge 1 and a falling edge as 0, it detected any edge as 1 and a lack of an edge as 0. This did let them pack a lot more bits in.
But in doing that (and whatever else they did), they multiplied the functional bandwidth of a lowly Toslink cable by a factor of about 6 -- using the same optical components at each end that Toshiba sold, and the same Toslink cable from the big box store.
I think we've beaten sound cards and SPDIF to death here. :)
It's been fun. Perhaps we can do this again some day.
