Based on the first sentence the one being referred to as the act of producing messages is encoding while the one that is being referred to as the act of understanding messages is decoding.
Encoding is being defined as a process in which is involved with having to put characters in a certain format in a way of having storage or for transmission.
Decoding, on the other hand, is a way of analyzing a message or having to determine or convert a specific data in order to be read and understand.
