"Suppose we have a 4 bit encoder and decoder it mean that it can generate 16 signals i.e 2^4 = 16 from 0000 to 1111.
You can send signal to encoder from 0000 to 1111 because these signals are parallel and transmission is done serially therefore the encoder takes these parallel inputs and converts them into a serial data. Now encoder sends this serial data to RF transmitter. The RF transmitter receives this serial data and mix it with high frequency and transmits it.
On the receiving side the RF receiver receives this high frequency and demixes the high frequency from serial data and sends it to decoder. The decoder understands this serial data format so that it converts this serial data back to parallel data you have used in decoder."