Grey coding ensures that just one bit changes at a time. The example he uses to show the importance of this is when binary code transitions from 7 (0b0111) to 8 (0b1000).

And now you have your 10-bit Gray-code using consecutive addresses of 0000-to-1001 (0 to 9 in decimal). In this case, the sequence followed by this Gray code counter implementation is: 4, 6, 2, 0, 8, ...

Grey coding ensures that just one bit changes at a time. The example he uses to show the importance of this is when binary code transitions from 7 (0b0111) to 8 (0b1000).

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But now suppose that – instead of having 16 words – we wish our FIFO to contain only 10 words. If we use our original Gray code, the sequence will now be as follows: 0000, 0001, 0011, 0010, 0110, 0111 ...