A method for generating a substantially sinusoidal waveform containing encoded digital data having one of a first value and a second value at selected phase angles .theta..sub.n comprises generating the waveform having an amplitude Y defined by a first function at phase angles lying outside of data regions, the first function being Y=sin .theta.; generating the waveform having an amplitude Y defined by the first function at phase angles lying inside the data regions having a range of .DELTA..theta. beginning at each phase angle .theta..sub.n where data of the first value is to be encoded; and generating the waveform having an amplitude Y defined by a second function different from Y=sin .theta. at phase angles lying inside the data regions having a range of .DELTA..theta. associated with each phase angle .theta..sub.n where data of the second value is to be encoded. The third harmonic of the waveform may be generated and used.