FAQ:Whats the difference between 128 vs 126 Speed Steps?
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The number 128 comes directly from the use of seven binary bits to set the locomotive speed plus one more bit used for indicating locomotive direction within the command. Together they make up a total of eight bits or one byte which is a standard unit of binary information for computers.
Of the 128 speed steps, two are reserved for special commands such as Emergency Stop. This leaves 126 usable speed step commands to control the locomotive normally. Thus, any throttle or cab with a display will only show 126 speed steps at full speed and not 128.
For more information on 126 versus 128 speed steps, see the speed steps article.