I have a degree in computer science have some knowledge of how data is transmitted between devices. The data is split up in packages of bytes. Then the procedure is basically the same as when you mail a letter at the post office. There is no data loss since if the package is verified by checksum when received and if not correct requested again. Since the bandwidth capabilities of the cable is many times that of our (audio) stream a buffer makes sure our bits can be aligned in correct order even if we would need to request a package again. A 3 minute song in uncompressed CD quality is about 31 MB. An old USB 2.0 cable can transfer 35 MB/s and would be able to transfer the whole song in less than one second (assuming that the dac has large enough buffer). USB 3.0 specced cable can transfer 625 MB/s (5Gbit/s) the whole song could transferred in 1/200 th path of a second. The rather old tech USB 2 can even transfer the same 3 minute song of uncompressed 192/24 in less than 6 seconds. What seems to confuse some people is that a CD transport might not be able to read a disc that migh have fingerprints or scratches and tiny read errors might end up as what we know as jitter. Much of this is solved by buffering that will allow the CD transport to try again to read. Many modrn dacs also have the ability to estimate the data and smooth out possible errors . This is however not the case with files on you computer. There are no read errors. The data is perfectly packaged and shipped to you dac.
