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1680s, "ear trumpet for the hard-of-hearing," coined from Greek mikros "small" (see mica) + phone "sound" (see fame (n.)). Modern meaning dates from 1929, from use in radio broadcasting and movie recording. Earlier, "amplifying telephone transmitter" (1878). Of the two spellings of the short form of the word, mike (1927) is older than mic (1961).
Any electromechanical device designed to convert sound into an electrical signal.
A microphone converts an acoustic waveform consisting of alternating high and low air pressure travelling through the air into a voltage. To do this it uses some kind of pressure or movement sensor. The simplest kind of microphone is actually very similar in construction to a loudspeaker.
The analogue electrical signal can be fed into a computer's sound card where it is amplified and sampled to convert it into a digital waveform for storage or transmission.