[jacquesm]

Encoders (not decoders) typically contain a glass disc which contains two 90 degree out-of-phase sinusoidal patterns of light/dark, these are digitized to some arbitrary precision to give you a number of 'steps' around one revolution of the encoder axis. The 90 degree out-of-phase signal is used to be able to determine the direction of motion.

[pasta]

Ah! Thank you for that info. I always thought they used binary disks (black and white or holes).