Encoding binary strings into arbitrary alphabets - string

Question

If you have a set of binary strings that are limited to some normally-small size such as 256 or up to 512 bytes like some of the hashing algorithms, then if you want to encode those bits of 1's and 0's into say hex (a 16-character alphabet), then you take the whole string at once into memory and convert it into hex. At least that's what I think it means.
I don't have this question fully formulated, but what I'm wondering is if you can convert an arbitrarily long binary string into some alphabet, without needing to read the whole string into memory. The reason this isn't fully formed question is because I'm not exactly sure if you typically do read the whole string into memory to create the encoded version.
So if you have something like this:
1011101010011011011101010011011011101010011011110011011110110110111101001100101010010100100000010111101110101001101101110101001101101110101001101111001101111011011011110100110010101001010010000001011110111010100110110111010100110110111010100110111100111011101010011011011101010011011011101010100101010010100100000010111101110101001101101110101001101101111010011011110011011110110110111101001100101010010100100000010111101110101001101101101101101101101111010100110110111010100110110111010100110111100110111101101101111010011001010100101001000000101111011101010011011011101010011011011101010011011110011011110110110111101001100 ... 10^50 longer
Something like the whole genetic code or a million billion times that, it would be too large to read into memory and too slow to wait to dynamically create an encoding of it into hex if you have to stream the whole thing through memory before you can figure out the final encoding.
So I'm wondering three things:
If you do have to read something fully in order to encode it into some other alphabet.
If you do, then why that is the case.
If you don't, then how it works.
The reason I'm asking is because looking at a string like 1010101, if I were to encode it as hex there are a few ways:
One character at a time, so it would essentially stay 1010101 unless the alphabet was {a, b} then it would be abababa. This is the best case because you don't have to read anything more than 1 character into memory to figure out the encoding. But it limits you to a 2-character alphabet. (Anything more than 2 character alphabets and I start getting confused)
By turning it into an integer, then converting that into a hex value. But this would require reading the whole value to compute the final (big)integer size. So that's where I get confused.
I feel like the third way (3) would be to read partial chunks of the input bytes somehow, like 1010 then010, but that would not work if the encoding was integers because 1010 010 = A 2 in hex, but 2 = 10 not 2 = 010. So it's like you would need to break it by having a 1 at the beginning of each chunk. But then what if you wanted to have each chunk no longer than 10 hex characters, but you have a long string of 1000 0's, then you need some other trick perhaps like having the encoded hex value tell you how many preceding zeroes you have, etc. So it seems like it gets complicated, wondering if there are already some systems established that have figured out how to do this. Hence the above questions.
For an example, say I wanted to encode the above binary string into an 8-bit alphabet, so like ASCII. Then I might have aBc?D4*&((!.... But then to deserialize this into the bits is one part, and to serialize the bits into this is another (these characters aren't the actual characters mapped to the above bit example).

Answer 1

But then what if you wanted to have each chunk no longer than 10 hex characters, but you have a long string of 1000 0's, then you need some other trick perhaps like having the encoded hex value tell you how many preceding zeroes you have, etc. So it seems like it gets complicated, wondering if there are already some systems established that have figured out how to do this
Yes you're way over-complicating it. To start simple, consider bit strings whose length is by definition a multiple of 4. They can be represented in hexadecimal by just grouping the bits up by 4 and remapping that to hexadecimal digits:
raw: 11011110101011011011111011101111
group: 1101 1110 1010 1101 1011 1110 1110 1111
remap: D E A D B E E F
So 11011110101011011011111011101111 -> DEADBEEF. That all the nibbles had their top bit set was a coincidence resulting from choosing an example that way. By definition the input is divided up into groups of four, and every hexadecimal digit is later decoded to a group of four bits, including leading zeroes if applicable. This is all that you need for typical hash codes which have a multiple of 4 bits.
The problems start when we want encode bit strings that are of variable length and not necessarily a multiple of 4 long, then there will have to be some padding somewhere, and the decoder needs to know how much padding there was (and where, but the location is a convention that you choose). This is why your example seemed so ambiguous: it is. Extra information needs to be added to tell the decoder how many bits to discard.
For example, leaving aside the mechanism that transmits the number of padding bits, we could encode 1010101 as A5 or AA or 5A (and more!) depending on the location we choose for the padding, whichever convention we choose the decoder needs to know that there is 1 bit of padding. To put that back in terms of bits, 1010101 could be encoded as any of these:
x101 0101
101x 0101
1010 x101
1010 101x
Where x marks the bit which is inserted in the encoder and discarded in the decoder. The value of that bit doesn't actually matter because it is discarded, so DA is also a fine encoding and so on.
All of the choices of where to put the padding still enable the bit string to be encoded incrementally, without storing the whole bit string in memory, though putting the padding in the first hexadecimal digit requires knowing the length of the bit string up front.
If you are asking this in the context of Huffman coding, you wouldn't want to calculate the length of the bit string in advance so the padding has to go at the end. Often an extra symbol is added to the alphabet that signals the end of the stream, which usually makes it unnecessary to explicitly store how much padding bits there are (there might be any number of them, but as they appear after the STOP symbol, the decoder automatically disregards them).