Why do electronic circuits employ circuit isolation?
Well, there are a lot of sensor applications where it is useful for the sensor to have no direct galvanic electrical connections with the system to which it is supplies data. One reason this is so is to avoid the risk of dangerous voltages or currents from one half of the system causing a catastrophic failure in the other half. Another reason is to eliminate ground loops.
Perhaps the most common way to employ circuit isolation is with utilizing transformers (magnetic isolation). Opto-isolators are yet another way. They are made up of an LED and a photocell (optical isolation). Another way is using small high voltage capacitors (capacitive isolation).
As you gain electronics knowledge you will see more and more uses for digital isolators. The figure below presents a very simple isolator application. Here the entire circuit constitutes a low-voltage system in which a digital isolator connects the SPI interface of a controller with the SPI interface of a data converter.
ISOLATED SPI INTERFACE
To learn more about the need for circuit isolation and digital isolators, I encourage you to sign up for the webinar: TI Webinar: Understanding Capacitive Isolation Technology for Industrial Applications