There are 3 connections on balanced cable. Hot, cold and ground. I understand you can do "ground lift" and still get the right signal. So what is the point of ground?
Ground may not always be earth ground exactly. It is also a reference point used in processing the signal. A sound signal builds moving to either side of a ground, both positive and negative voltage. When you ground lift, you disconnect the ground from the ground of the source and instead connect an empty ground or independent ground (some nicer ground lifts hook to earth ground.)
This can be beneficial if there is a ground differential between your source and destination as it may prevent or lessen the buzzing caused by a ground differential, however it also causes problems of its own as the reference point is no longer consistent between the source and destination.
In general, you want a common ground between all your devices and in that case you want the ground on the wire as well, but if you can't have it, ground lift is the next best option to try if you NEED to, but you still lose some of the protection afforded by having a common ground across the wire.
The idea with balanced systems is partly to cancel out noise and keep the cables longer without adding additional noise when cranking up the signal. To do this you phase invert the cold signal before it goes through the cable. When the signal exit the cable entering the balanced input of a unit the cold signal gets phase inverted back. This might seem unnecessary, but there is a good reason for it. When external electromagnetic noise gets into the cables hot and cold signals it will have the same phase in each. So when the cold gets phase inverted back to the same phase as the hot, the noise gets phase inverted in the cold but not the hot. Thus it gets canceled out more or less when the hot and cold sums up. The earth on the other hand improves the protection by connecting the shield that is wrapped around the hot and cold to the ground.
Please correct me if I'm wrong. ☺
This is also important when using sound card or other similar devices. Your cables can act as an antenna, de ground that ideally should be completely covering your hot and cold cable so those signals can't interfere with the hot or cold cable.
other example; For instance on my sound card (sapphire)my speakers started to give a low amplitude frequency sound whilst my mouse moved, when I then used balanced cables the sound stopped. So the mouse frequencies interfered with the signals of the sound of my soundcard. By balancing them the frequency shifts get lost on that cable and in to the ground.