Refinery29 offers a primer on sound machines.
Essentially, all of these noises work by masking other potentially annoying sounds (hello, squeaky hallway door) and making them seem less alarming to your brain. That way, you can focus on your work or your ZZZs. Some people believe that certain types of ambient noise are better for certain tasks, such as playing coffee shop sounds in the background while you work and a fan while you sleep. And there is some evidence to suggest that pink noise might be particularly useful for sleeping.
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