How normal hearing works
In normal hearing, sound waves travel through the ear canal and cause the ear drum (tympanic membrane) to vibrate. This vibration is transferred to the three middle ear bones, the anvil, hammer and stirrup. These bones amplify the vibration and transfer the energy to the round window - the entrance to the cochlea. This creates movement of the fluid in the cochlea, where the hair cells move in response to the movement. The amount of fluid movement/hair cell response is based on the frequency and amplitude of the incoming sound wave. When the hair cell moves, it creates an electrical signal (increase in potassium ions) that stimulates the associated nerve. The nerve sends these electrical signals to the brain, which interprets them as sound.
How cochlear implants work
The behind-the-ear microphone (with battery) records sounds from the environment. These recordings are converted into discrete, frequency-banded, digital signals via digital sound processing algorithms. The sound transmitter (held magnetically in place) sends these data signals wirelessly across the skin, along with power for the implant.
The implanted sound transmitter/receiver receives these signals, and encodes them into electrical pulses (on/off signals) that are sent via wire to the cochlear electrode. Each electrical pulse is assigned/matched to a specific electrode that contacts with a specific nerve. When that nerve is stimulated by the electrode, the nerve fibres send a signal to the brain to provide a sensation of sound.