Why are the ALMA receivers' ADCs only 3-bits?
It is wasteful to sample with many bits because the signal to noise ratio at the ADC of a radio telescope is typically &lt;&lt; 1, so using many bits would just be resolving noise. (An exception to this is when there is strong radio-frequency interference that needs to be resolved, but this is not a big problem for ALMA due to its location and observing frequencies).

High dynamic range measurements arise after averaging together many samples (or correlations of samples), which boosts the SNR to a meaningful level.

Using very few bits at the ADC does introduce quantization noise that reduces the efficiency of the instrument, but 3 bits is enough to achieve 96% efficiency [1].

[1] Convenient formulas for quantization efficiency