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If you have this kind of encoder then you can connect it using the figure attached
This is a really useful project that I am keen to try out myself but I am not sure about the wiring connections between the digispark and rotary encoder.As shown in the figure I have a KY-040 encoder that has 5 pinouts.I have connected CLK to P0, DT to P1 and GND to GND but it does not work.Do help if possible.Thanks!
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