Abstract: The present invention comprises a distributed data processing system including a plurality of data processing elements for expeditiously performing an encoding or prediction function pursuant to a context-based model in an adaptive, optimal and time-progressive manner. The distributed data processing system, having access to each symbol of an input data string at each clock cycle, adaptively generates context-relevant data sets which provide the best model for coding or prediction based on the input symbols. Each symbol and its best model for encoding or prediction emerge concurrently from the system, resulting in a favorable time complexity of .omicron.(n) for an n-symbol input data string.