Data encryption is the process of scrambling readable data into a coded form using a key, so that only someone with the right key can turn it back into something useful. To anyone else, an encrypted file looks like random nonsense. The data is still there; it just cannot be read without the key.
A simple way to picture it: imagine locking a letter in a box before posting it. Anyone can carry the box, drop it, or even steal it, but without the key they cannot open it and read what is inside. Encryption is that lock for digital data. It protects information in transit as it travels across the internet, and at rest while it sits in a database or on a disk. The widely used AES standard, especially AES-256, is the workhorse behind most of it. When your bank app shows a padlock, that lock is AES and its cousins doing the work in the background.
Encryption is not the same as hashing. Hashing is one-way and used for things like password storage, while encryption is meant to be reversed by the right person. Both matter, and using the wrong one for the wrong job is a common mistake. The other half of the job is key handling. A strong lock means nothing if the key is taped to the door.
At TopDevs we encrypt sensitive data by default, both on the wire and in storage, and we treat key management as carefully as the data itself, because an encryption scheme is only as strong as the way its keys are kept.