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Virtually all digital devices use an encoder to help them function. Bits and bytes are just numbers and therefore all executables and data, regardless of its analog type, must be encoded as a number that the device can understand natively. Devices that communicate with each other must also use a common encoding (commonly known as a protocol), which needn't be and often isn't the same as that which is natively used by the devices. Standalone digital devices such as digital watches needn't use an encoder per se, but the digital information has to be digitally encoded in some form or another and must be decoded to produce an analog output that we humans can understand, even if it is only to turn certain groups of LCD segments on and off according to the current state of the digital data. Devices that function through a direct 1 to 1 relationship between the digital and analog data have no need for an encoder or decoder of any kind, but I'd be hard pressed to think of any such device beyond that of a simple switch, which is a purely analog device. Only when switches are used in combination can you have a truly digital device and those combinations must be encoded and decoded accordingly.

Encoders can either use fixed-length or variable-length bit streams, so long as the devices at each endpoint can translate the codes successfully. An example of variable length encoding is prefix coded data (most notably Huffman encoded data), where the most frequent fixed-length codes are replaced with shorter encodings, while the least frequent codes have longer encodings, thus speeding up the throughput of data between the devices. Both endpoints use the same translation table to convert the prefix codes to and from native codes. The translation table may be hard-coded to the devices based upon probabilities, however more efficient schemes will transmit the translation table using a common protocol before reverting to prefix encoded transmissions via the same protocol.

Devices that make extensive use of encoders are mass-storage devices, such as hard-drives, which must replicate digital data in an analog form that includes additional data interleaved into the data stream for analog timing and digital error-checking purposes. Thus the data that is physically stored upon the device bears no resemblance whatsoever to the original data and must be encoded (when written) and decoded (when read) by the storage device itself.

Other common devices that extensively use encoders are digital cameras and recorders (RAW, JPG and MPEG encoding), digital music devices (CD and MP3 players). Even cars with on-board diagnostic computers use encoding schemes that can be translated by plugging in special computers to provide analog data about the car's internal faults. Ultimately, any device that employs digital data must use an encoder of some kind, whether it uses 2-bits per element or 128-bits per element. It's all about the translation of what those numbers actually represent that defines an individual device's functionality.

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