Traditional packet switching treats packets as "cars" that often cause congestions at junctions like bridges and routers the way cars jam at intersections. Network coding treats junctions as encoders that can mix multiple packets and decode later at other junctions. When multiple packets arrive at the same junction, they are not queued to be served. Instead, they are coded together. So basically the congestion does not exist any longer.
It may be very useful in wireless communications as well as wired computer communications.
extended reading: Network coding(full text)
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