Encoders convert video files into other formats and allow you to do more with streaming. As mentioned previously, there are two different types of encoders you can utilize while conducting a live stream on YouTube. Software encoders are programs that you can run on your computer, whether it be a laptop or desktop. Typically, software encoders are free or relatively inexpensive.
On the other hand, hardware encoders are physical objects that you hook up to your device. Because they are pretty expensive, hardware encoders are generally used by professional live streamers.