The 2D XYZ barcode will encode text using error detection and correction. It can encode any language into a barcode that can still be read even if the barcode is damaged. The process involves translating text to ASCII, adding error detection with hamming bits, grouping the bits into blocks, and encoding the blocks as a 64x64 pixel barcode pattern. Extra pixels are used to fill out the barcode if the message uses less than the maximum 204 characters.