The document discusses Lempel-Ziv (LZ) coding and data compression. LZ coding parses a data stream into the shortest unique subsequences not seen before, and encodes each by pointing to earlier matches and adding an extra bit. This allows for adaptive compression without prior source statistics. Encoding finds the longest matching prefix and transmits a pointer and innovation bit. Decoding uses the pointer to find the match and adds the innovation bit. Examples demonstrate the encoding and decoding process.