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In this video, the narrator explains how encryption works, relating it to a previous discussion about DNS. They use the example of a person named Ethan wanting to communicate with a server, which is visualized as having blinking lights. The server is referred to by its fully qualified domain name (FQDN), which maps to IP addresses. Ethan's DNS client sends a request to the DNS service to retrieve the IP address if it's not already cached. The narrator emphasizes that modern web communication is encrypted, with all web pages using HTTPS for secure connections.