|MadSci Network: Engineering|
The secret is in the transformer and the nature of voltage. Nothing has an absolute voltage, only a voltage relative to something else. The most convenient thing to measure voltage relative to is ground. The neutral wire coming from the power plant into your transformer is grounded at one point, forcing it to have the same voltage as ground (usually pegged at zero). Thus the voltage difference between the two wires forces the hot wire to have a voltage (relative to ground) of something like 20,000 volts.
There are two coils in your transformer, with the ratio of turns in the coils corresponding to the ratio of voltages across each coil. The coil that connects to your house has a voltage across it of 240 volts. The two hot wires are connected to either end of this coil, and necessarily have opposite polarity. The neutral wire is connected to the middle of the coil, and has a voltage difference of 120 volts with respect to either of the hot wires. Then the neutral wire is connected to ground, so it has a voltage of zero (with respect to ground) and each of the hot wires has a voltage of 120 (with respect to ground). The hot wires have opposite polarity since they are maintained by the transformer at a voltage of 240 volts with respect to each other.
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