Recognize that the expression \( \left(y+\frac{1}{8}\right)\left(y-\frac{1}{8}\right) \) is a product of two binomials in the form \( (a+b)(a-b) \), which is a difference of squares pattern.
Recall the difference of squares formula: \( (a+b)(a-b) = a^2 - b^2 \). Here, \( a = y \) and \( b = \frac{1}{8} \).
Square each term separately: calculate \( a^2 = y^2 \) and \( b^2 = \left(\frac{1}{8}\right)^2 \).
Substitute these squared terms back into the difference of squares formula to get \( y^2 - \left(\frac{1}{8}\right)^2 \).
Simplify the squared fraction \( \left(\frac{1}{8}\right)^2 \) to \( \frac{1}{64} \), resulting in the final expression \( y^2 - \frac{1}{64} \).