Raw video is huge: hour at p = + GB uncompressed. Encoding compresses using codecs: H.264 (widely compatible), H.265/HEVC (% smaller), VP9, AV1 (best compression, CPU-intensive).
Transcoding creates multiple renditions: p, p, p, p, K. Each resolution has multiple bitrates. YouTube generates - versions per video. Distributed encoding farms process uploads in parallel.