The difference between encoding and encrypting can best
be explained in terms of mathematical functions...
When you encode a piece of data, d, you are applying a
function, f, that is reversible by another function, g. Or,
in other words, g(f(d)) = d... All the decoding requires
is an algorithm.
When encrypting data (I'm going to simplify things) you have
a function that takes several parameters and spits out
encrypted data. In order to decrypt the data, you must also
posess the other data to apply the correct function.
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