The "Sloot Digital Coding System" is clearly hokum, but the "alien's stick" story is more or less the same as arithmetic coding - except instead of a notch on a

The "Sloot Digital Coding System" is clearly hokum, but the "alien's stick" story is more or less the same as arithmetic coding - except instead of a notch on a stick, the fraction is stored as a sequence of bits, so it's not magically infinite precision.