A Terminal node controller is a piece of hardware or software that enables the use of certain digital modes. They come in 2 flavors: hardware and software.

How is a Hardware TNC different from a digital interface (Digi-Rig, Signalink)?
Every TNC is a digital interface, but not every digital interface is a TNC.

A hardware TNC is a more complicated device compared to a standard digital interface. A digital interface does not do any ‘thinking’ vs a TNC. A TNC is used for timing, push-to-talk, error correction, and the structure of that digital mode.

A digital interface is simply the connection between the PC and the radio. It carries audio, PTT (Push-to-talk), and sometimes CAT control signals (Frequency).

If you remember the days of dial-up internet, a hardware TNC was like your 56K modem. The modem connected to the phone network and the PC, which would encode and decode packets from the phone network while it fed the decoded data to the PC.

What is a Software TNC? Do I need a Hardware TNC to use it?
No, a software TNC is a result of the high cost of hardware TNCs. Hardware TNCs are also limited to the modes/protocols that are built into them. Some could be flashed/upgraded with the latest modes, but this is not always the case.

Hardware TNCs fell out of favor because of their higher cost and limited modes they could offer. Software TNCs became more popular because it is easier to update software than to update hardware for every new digital mode.

What modes need a TNC and which do not?
The modes that need a TNC need more than just encoding and decoding digital messages. A TNC is responsible for error correction, timing, network, and addressing.

Hardware TNCs are not as common as they used to be. Today, most hardware TNCs have been replaced by software TNCs. Today’s computers are faster and can handle the extra load of encoding and decoding these signals. Software TNCs still need a way to interface with the radio to get audio signals and PTT. (3 basic signals, audio from radio (RX), audio to radio (TX), and PTT). Modern radios use a USB interface to fit this role, but are not as feature-packed as external digital interfaces.

Do I need a Hardware TNC to use Winlink or APRS?
You can use a hardware TNC, but you don’t need one. You will need some software to act as a TNC, and you will still need a digital interface to connect to your radio. The cost of a hardware TNC is what has driven the fast development of software TNCs like VARA and Direwolf.

My Recommendation
Most modern radios (ICOM 7300 or others) use a built-in USB interface. This interface handles your PTT, audio signals, and CAT control. With this USB interface, you can use a software TNC. There are very few cases where a hardware TNC is needed instead of a software TNC. With a software TNC, like VARA or Direwolf, you can run Winlink.

The only exception is if you want to use PACTOR modes. PACTOR is a proprietary mode, and it can only be done with a hardware TNC, which is extremely expensive. The current PACTOR4 TNCs can cost up to $3,000! Older PACTOR models can be found used. If you want to use Winlink or APRS, there are software TNCs that will do the job and work with any digital interface.