code:

#include <Encoder.h>
#include <Adafruit_NeoPixel.h>


int strip_length = 8;
int strip_pin = 7;

Adafruit_NeoPixel strip = Adafruit_NeoPixel(strip_length,strip_pin);

Encoder myEnc(3, 4); //setup encoder on those pins (only 1 is an interrupt for medium accuracy according to library)

int red1=0;
int green1=0;
int blue1=0;

int red2=0;
int green2=0;
int blue2=0;


uint32_t basecolour = strip.Color(red1,green1,blue1);
uint32_t changecolor = strip.Color(red2,green2,blue2); //0,200,255 is a nice blue

// lookup table that corrects for the non linear brightness of LEDs and PWMs
// sourced from internet, is based on a few things and is somewhat s shaped 
static const int values[256] = 
{
  0x00, 0x00, 0x00, 0x00, 0x00, 0x00, 0x00, 0x00, 0x00, 0x00, 0x01, 0x01, 0x01, 0x01, 0x01, 0x01,
  0x01, 0x01, 0x01, 0x01, 0x01, 0x01, 0x01, 0x01, 0x01, 0x02, 0x02, 0x02, 0x02, 0x02, 0x02, 0x02,
  0x02, 0x02, 0x03, 0x03, 0x03, 0x03, 0x03, 0x03, 0x04, 0x04, 0x04, 0x04, 0x04, 0x05, 0x05, 0x05,
  0x05, 0x06, 0x06, 0x06, 0x07, 0x07, 0x07, 0x08, 0x08, 0x08, 0x09, 0x09, 0x0A, 0x0A, 0x0B, 0x0B,
  0x0C, 0x0C, 0x0D, 0x0D, 0x0E, 0x0F, 0x0F, 0x10, 0x11, 0x11, 0x12, 0x13, 0x14, 0x15, 0x16, 0x17,
  0x18, 0x19, 0x1A, 0x1B, 0x1C, 0x1D, 0x1F, 0x20, 0x21, 0x23, 0x24, 0x26, 0x27, 0x29, 0x2B, 0x2C,
  0x2E, 0x30, 0x32, 0x34, 0x36, 0x38, 0x3A, 0x3C, 0x3E, 0x40, 0x43, 0x45, 0x47, 0x4A, 0x4C, 0x4F,
  0x51, 0x54, 0x57, 0x59, 0x5C, 0x5F, 0x62, 0x64, 0x67, 0x6A, 0x6D, 0x70, 0x73, 0x76, 0x79, 0x7C,
  0x7F, 0x82, 0x85, 0x88, 0x8B, 0x8E, 0x91, 0x94, 0x97, 0x9A, 0x9C, 0x9F, 0xA2, 0xA5, 0xA7, 0xAA,
  0xAD, 0xAF, 0xB2, 0xB4, 0xB7, 0xB9, 0xBB, 0xBE, 0xC0, 0xC2, 0xC4, 0xC6, 0xC8, 0xCA, 0xCC, 0xCE,
  0xD0, 0xD2, 0xD3, 0xD5, 0xD7, 0xD8, 0xDA, 0xDB, 0xDD, 0xDE, 0xDF, 0xE1, 0xE2, 0xE3, 0xE4, 0xE5,
  0xE6, 0xE7, 0xE8, 0xE9, 0xEA, 0xEB, 0xEC, 0xED, 0xED, 0xEE, 0xEF, 0xEF, 0xF0, 0xF1, 0xF1, 0xF2,
  0xF2, 0xF3, 0xF3, 0xF4, 0xF4, 0xF5, 0xF5, 0xF6, 0xF6, 0xF6, 0xF7, 0xF7, 0xF7, 0xF8, 0xF8, 0xF8,
  0xF9, 0xF9, 0xF9, 0xF9, 0xFA, 0xFA, 0xFA, 0xFA, 0xFA, 0xFB, 0xFB, 0xFB, 0xFB, 0xFB, 0xFB, 0xFC,
  0xFC, 0xFC, 0xFC, 0xFC, 0xFC, 0xFC, 0xFC, 0xFC, 0xFD, 0xFD, 0xFD, 0xFD, 0xFD, 0xFD, 0xFD, 0xFD,
  0xFD, 0xFD, 0xFD, 0xFD, 0xFD, 0xFD, 0xFD, 0xFE, 0xFE, 0xFE, 0xFE, 0xFE, 0xFE, 0xFE, 0xFF, 0xFF
};

float colourdivisor; //initialisation

long t=0; //time counter
long buttonrate=400; //debonuncer for button

int colourindex=2;

long oldPosition  = -999;
long newPosition;
int newColour;

int increment=0;
int incrementamount=4;

int locus=-1;
bool blink_state=0;
long blink_timer;

void setup() 
{
  Serial.begin(9600);
  Serial.println("Basic Encoder Test:");

  strip.begin();
  stripgradient();
  strip.show();

  attachInterrupt(0, increment_locus, FALLING);
  t=millis();

  pinMode(2, INPUT);
  digitalWrite(2, HIGH);
}

void loop() 
{
  increment=0;
  stripgradient();
  if (blink_state==1)
  {
    blink();
  }
  Serial.println(digitalRead(2));
  strip.show();
  
  newPosition = myEnc.read();
  if (newPosition > oldPosition) 
  {
    oldPosition = newPosition;
    increment=incrementamount;
    modifycolour();
  }
  else if(newPosition < oldPosition)
  {
    oldPosition= newPosition;
    increment=-incrementamount;
    modifycolour();
  }
}

void blink()
{
  if (millis()>blink_timer+buttonrate && digitalRead(2)==HIGH)
  {
    blink_state=0;
    return;
    blink_timer=millis();
  }

  /*if (digitalRead(2)==LOW)
  {
   blink_state=0;
    return;
  
  }*/

   

  switch (locus)
  {
    case 0:
    strip.setPixelColor(strip_length-1, 255, 0, 0);
    break;
    case 1:
    strip.setPixelColor(strip_length-1, 0,255,0);
    break;
    case 2:
    strip.setPixelColor(strip_length-1, 0,0,255);
    break;
    case 3:
    strip.setPixelColor(0, 255,0,0);
    break;
    case 4:
    strip.setPixelColor(0, 0,255,0);
    break;
    case 5:
    strip.setPixelColor(0, 0,0,255);
    break;



  }





}


void modifycolour()
{
  switch (locus)
  {
    case 0:
    red1=constrain(red1+increment,0,255);
    break;
    case 1:
    green1=constrain(green1+increment,0,255);
    break;
    case 2:
    blue1=constrain(blue1+increment,0,255);
    break;
    case 3:
    red2=constrain(red2+increment,0,255);
    break;
    case 4:
    green2=constrain(green2+increment,0,255);
    break;
    case 5:
    blue2=constrain(blue2+increment,0,255);
    break;
  }
  basecolour = strip.Color(red1,green1,blue1);
  changecolor = strip.Color(red2,green2,blue2);
  
}

void increment_locus()
{
  if (millis()>t+buttonrate)
  {
    locus++;
    if (locus>5)
    {
      locus=0;
    }
    t=millis();
    blink_state=1;
    //blink_timer=millis();
  }
}


void stripgradient()
{

  for (int i=0; i<strip_length; i++)
  {
    colourdivisor = i/strip_length;
    strip.setPixelColor(i,divcolour(basecolour,changecolor,(i)));
  }

  
}


uint32_t divcolour(uint32_t colour_a,uint32_t colour_b,float divi)
{
  divi = divi/strip_length;
  divi=constrain(divi, 0, 1);

  unsigned int a_b =   colour_a & 0xff;
  unsigned int a_g =   (colour_a>>8) & 0xff;
  unsigned int a_r =   (colour_a>>16) & 0xff;

  unsigned int b_b =   colour_b & 0xff;
  unsigned int b_g =   (colour_b>>8) & 0xff;
  unsigned int b_r =   (colour_b>>16) & 0xff;

  unsigned int return_b = (a_b*divi) + (b_b*(1-divi));
  unsigned int return_g = (a_g*divi) + (b_g*(1-divi));
  unsigned int return_r = (a_r*divi) + (b_r*(1-divi));

  // "recalculate" using lookup table
  return_r=values[return_r];
  return_g=values[return_g];
  return_b=values[return_b];

  return strip.Color(return_r,return_g,return_b);
}