Difference between encoding and encryption
Encoding:
Purpose: The purpose of encoding is to transform data so that it can be properly (and safely) consumed by a different type of system.
Used for: Maintaining data usability i.e., to ensure that it is able to be properly consumed.
Data Retrieval Mechanism: No key and can be easily reversed provided we know what algorithm was used in encoding.
Algorithms Used: ASCII, Unicode, URL Encoding, Base64.
Example: Binary data being sent over email, or viewing special characters on a web page.
Encryption:
Purpose: The purpose of encryption is to transform data in order to keep it secret from others.
Used for: Maintaining data confidentiality i.e., to ensure the data cannot be consumed by anyone other than the intended recipient(s).
Data Retrieval Mechanism: Original data can be obtained if we know the key and encryption algorithm used.
Algorithms Used: AES, Blowfish, RSA.
Example: Sending someone a secret letter that only they should be able to read, or securely sending a password over the Internet.
Reference URL: http://danielmiessler.com/study/encoding_vs_encryption/
Encoding transforms data into another format using a scheme that is publicly available so that it can easily be reversed.
Encryption transforms data into another format in such a way that only specific individual(s) can reverse the transformation.
For Summary -
Encoding is for maintaining data usability and uses schemes that are publicly available.
Encryption is for maintaining data confidentiality and thus the ability to reverse the transformation (keys) are limited to certain people.
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