Changing from buttons to rotary encoder

Using Arduino Project Guidance
1

I have a project I am doing and am wondering how easy it would be to change three buttons to control the timer setting to be a rotary encoder instead?

I have never worked with encoders, but saving space on the item would be hugely beneficial.

Any advice would be greatly appreciated

#include <Wire.h>
#include <LiquidCrystal_I2C.h>
LiquidCrystal_I2C lcd(0x27, 20, 4); // the I2C LCD address of your display might differ, in this case,

// DECLARATION:
// Power for LCD
int LCD_power = 8;
// beep/light
int signal_pin = 10;
int main_state = 0;
// Buttons
const int button_1 = 2;
boolean button_1_state = 0;
const int button_2 = 3;
boolean button_2_state = 0;
const int button_3 = 4;
boolean button_3_state = 0;
// Timer
int timer = 1;
int timer_sec;
float timer_fast;
float timer_faster;
int timer_sec_remainder;
int timer_min;
int SEQ = 300;
//Relay
const int RELAYPIN = 13;
// Bomb wires:
const int Red_wire = 12;
boolean R = 0;
const int Black_wire = 11;
boolean B = 0;
const int Green_wire = 7;
boolean G = 0;
const int Yellow_wire = 8;
boolean Y = 0;
int D_current[] = {R, B, G, Y};
// Disarm state:
int D_State = 0;
int D0[] = {0, 0, 0, 0};
int D1[] = {0, 0, 0, 0};
int D2[] = {0, 0, 0, 0};
int D3[] = {0, 0, 0, 0};

void activateRelay() {
  digitalWrite(RELAYPIN, HIGH);  // turn the LED on (HIGH is the voltage level)
}

void deactivateRelay() {
  digitalWrite(RELAYPIN, LOW);
}

void setup() {
  pinMode(LCD_power, OUTPUT);
  digitalWrite(LCD_power, HIGH);
  // Signal pin:
  pinMode(signal_pin, OUTPUT);
  // Buttons:
  pinMode(button_1, INPUT);
  pinMode(button_2, INPUT);
  pinMode(button_3, INPUT);
  lcd.init();                      // initialize the lcd
  Serial.begin(9600);              // initialize debug serial
  // Bomb wires:
  pinMode(Red_wire, INPUT_PULLUP);
  pinMode(Black_wire, INPUT_PULLUP);
  pinMode(Green_wire, INPUT_PULLUP);
  pinMode(Yellow_wire, INPUT_PULLUP);
  // INTRO MESSAGE TO LCD:

  digitalWrite(signal_pin, 1);
  delay(50);
  digitalWrite(signal_pin, 0);
  delay(50);
  digitalWrite(signal_pin, 1);
  delay(50);
  digitalWrite(signal_pin, 0);
  delay(50);

  lcd.backlight();
  lcd.clear();
  lcd.setCursor(0, 0);
  lcd.print("Set timer [min]:");
  lcd.setCursor(0, 1);
  lcd.print("timer = ");
  lcd.print(timer);
}

void loop() {
  // ... (existing code)

  // STATE 0 - SET THE TIMER:
  if (main_state == 0) {
    button_1_state = digitalRead(button_1);
    if (button_1_state == LOW) {
      delay(100);
    }
    else if (button_1_state == HIGH) {
      timer = timer + 1;
      lcd.clear();
      lcd.setCursor(0, 0);
      lcd.print("Set timer [min]:");
      lcd.setCursor(0, 1);
      lcd.print("timer = ");
      lcd.print(timer);
      delay(150);
    }

    button_2_state = digitalRead(button_2);
    if (button_2_state == LOW) {
      delay(100);
    }
    else if (button_2_state == HIGH && timer > 1) {
      timer = timer - 1;
      lcd.clear();
      lcd.setCursor(0, 0);
      lcd.print("Set timer [min]:");
      lcd.setCursor(0, 1);
      lcd.print("timer = ");
      lcd.print(timer);
      delay(150);
    }

    button_3_state = digitalRead(button_3);
    if (button_3_state == LOW) {
      delay(1);
    }
    else if (button_3_state == HIGH) {
      main_state = 1;
    }
  } // END STATE 0

  // STATE 1 - SET SNOOSE AND DISARM:
  else if (main_state == 1) {
    lcd.clear();
    lcd.setCursor(0, 0);
    lcd.print("Generating");
    delay(200);
    lcd.setCursor(0, 0);
    lcd.print("Generating.");
    delay(200);
    lcd.setCursor(0, 0);
    lcd.print("Generating..");
    delay(200);
    lcd.setCursor(0, 0);
    lcd.print("Generating...");
    delay(200);
    lcd.setCursor(0, 1);
    lcd.print("Done!");
    delay(1000);

    // print a random number from 1 to 24, random(1, 25)
    randomSeed(analogRead(0));
    int SEQ = random(1, 25);
    // SETTING THE SEQ:
    if (SEQ == 1) {
      lcd.clear();
      lcd.setCursor(0, 0);
      lcd.print("KEY: R,B,G (01)");
      // Set the Disarm steps {R,B,G,Y}:
      //int D0[] = {0,0,0,0}; // Fully armed
      //int D1[] = {1,0,0,0}; // *
      D1[0] = 1;
      //int D2[] = {1,1,0,0}; // **
      D2[0] = 1;
      D2[1] = 1;
      //int D3[] = {1,1,1,0}; // Disarmed
      D3[0] = 1;
      D3[1] = 1;
      D3[2] = 1;
      delay(1000);
    }
    else if (SEQ == 2) {
      lcd.clear();
      lcd.setCursor(0, 0);
      lcd.print("KEY: R,B,Y (02)");
      // Set the Disarm steps {R,B,G,Y}:
      //int D0[] = {0,0,0,0}; // Fully armed
      //int D1[] = {1,0,0,0}; // *
      D1[0] = 1;
      //int D2[] = {1,1,0,0}; // **
      D2[0] = 1;
      D2[1] = 1;
      //int D3[] = {1,1,0,1}; // Disarmed
      D3[0] = 1;
      D3[1] = 1;
      D3[3] = 1;
      delay(1000);
    }
    else if (SEQ == 3) {
      lcd.clear();
      lcd.setCursor(0, 0);
      lcd.print("KEY: R,G,B (03)");
      // Set the Disarm steps {R,B,G,Y}:
      //int D0[] = {0,0,0,0}; // Fully armed
      //int D1[] = {1,0,0,0}; // *
      D1[0] = 1;
      //int D2[] = {1,0,1,0}; // **
      D2[0] = 1;
      D2[2] = 1;
      //int D3[] = {1,1,1,0}; // Disarmed
      D3[0] = 1;
      D3[1] = 1;
      D3[2] = 1;
      delay(1000);
    }
    else if (SEQ == 4) {
      lcd.clear();
      lcd.setCursor(0, 0);
      lcd.print("KEY: R,G,Y");
      // Set the Disarm steps {R,B,G,Y}:
      //int D0[] = {0,0,0,0}; // Fully armed
      //int D1[] = {1,0,0,0}; // *
      D1[0] = 1;
      //int D2[] = {1,0,1,0}; // **
      D2[0] = 1;
      D2[2] = 1;
      //int D3[] = {1,0,1,1}; // Disarmed
      D3[0] = 1;
      D3[2] = 1;
      D3[3] = 1;
      delay(1000);
    }
    else if (SEQ == 5) {
      lcd.clear();
      lcd.setCursor(0, 0);
      lcd.print("KEY: R,Y,B");
      // Set the Disarm steps {R,B,G,Y}:
      //int D0[] = {0,0,0,0}; // Fully armed
      //int D1[] = {1,0,0,0}; // *
      D1[0] = 1;
      //int D2[] = {1,0,0,1}; // **
      D2[0] = 1;
      D2[3] = 1;
      //int D3[] = {1,1,0,1}; // Disarmed
      D3[0] = 1;
      D3[1] = 1;
      D3[3] = 1;
      delay(1000);
    }
    else if (SEQ == 6) {
      lcd.clear();
      lcd.setCursor(0, 0);
      lcd.print("KEY: R,Y,G");
      // Set the Disarm steps {R,B,G,Y}:
      //int D0[] = {0,0,0,0}; // Fully armed
      //int D1[] = {1,0,0,0}; // *
      D1[0] = 1;
      //int D2[] = {1,0,0,1}; // **
      D2[0] = 1;
      D2[3] = 1;
      //int D3[] = {1,0,1,1}; // Disarmed
      D3[0] = 1;
      D3[2] = 1;
      D3[3] = 1;
      delay(1000);
    }
    else if (SEQ == 7) {
      lcd.clear();
      lcd.setCursor(0, 0);
      lcd.print("KEY: B,R,G");
      // Set the Disarm steps {R,B,G,Y}:
      //int D0[] = {0,0,0,0}; // Fully armed
      //int D1[] = {0,1,0,0}; // *
      D1[1] = 1;
      //int D2[] = {1,1,0,0}; // **
      D2[0] = 1;
      D2[1] = 1;
      //int D3[] = {1,1,1,0}; // Disarmed
      D3[0] = 1;
      D3[1] = 1;
      D3[2] = 1;
      delay(1000);
    }
    else if (SEQ == 8) {
      lcd.clear();
      lcd.setCursor(0, 0);
      lcd.print("KEY: B,R,Y");
      // Set the Disarm steps {R,B,G,Y}:
      //int D0[] = {0,0,0,0}; // Fully armed
      //int D1[] = {0,1,0,0}; // *
      D1[1] = 1;
      //int D2[] = {1,1,0,0}; // **
      D2[0] = 1;
      D2[1] = 1;
      //int D3[] = {1,1,0,1}; // Disarmed
      D3[0] = 1;
      D3[1] = 1;
      D3[3] = 1;
      delay(1000);
    }
    else if (SEQ == 9) {
      lcd.clear();
      lcd.setCursor(0, 0);
      lcd.print("KEY: B,G,R");
      // Set the Disarm steps {R,B,G,Y}:
      //int D0[] = {0,0,0,0}; // Fully armed
      //int D1[] = {0,1,0,0}; // *
      D1[1] = 1;
      //int D2[] = {0,1,1,0}; // **
      D2[1] = 1;
      D2[2] = 1;
      //int D3[] = {1,1,1,0}; // Disarmed
      D3[0] = 1;
      D3[1] = 1;
      D3[2] = 1;
      delay(1000);
    }
    else if (SEQ == 10) {
      lcd.clear();
      lcd.setCursor(0, 0);
      lcd.print("KEY: B,G,Y");
      // Set the Disarm steps {R,B,G,Y}:
      //int D0[] = {0,0,0,0}; // Fully armed
      //int D1[] = {0,1,0,0}; // *
      D1[1] = 1;
      //int D2[] = {0,1,1,0}; // **
      D2[1] = 1;
      D2[2] = 1;
      //int D3[] = {0,1,1,1}; // Disarmed
      D3[1] = 1;
      D3[2] = 1;
      D3[3] = 1;
      delay(1000);
    }
    else if (SEQ == 11) {
      lcd.clear();
      lcd.setCursor(0, 0);
      lcd.print("KEY: B,Y,R");
      // Set the Disarm steps {R,B,G,Y}:
      //int D0[] = {0,0,0,0}; // Fully armed
      //int D1[] = {0,1,0,0}; // *
      D1[1] = 1;
      //int D2[] = {0,1,0,1}; // **
      D2[1] = 1;
      D2[3] = 1;
      //int D3[] = {1,1,0,1}; // Disarmed
      D3[0] = 1;
      D3[1] = 1;
      D3[3] = 1;
      delay(1000);
    }
    else if (SEQ == 12) {
      lcd.clear();
      lcd.setCursor(0, 0);
      lcd.print("KEY: B,Y,G");
      // Set the Disarm steps {R,B,G,Y}:
      //int D0[] = {0,0,0,0}; // Fully armed
      //int D1[] = {0,1,0,0}; // *
      D1[1] = 1;
      //int D2[] = {0,1,0,1}; // **
      D2[1] = 1;
      D2[3] = 1;
      //int D3[] = {0,1,1,1}; // Disarmed
      D3[1] = 1;
      D3[2] = 1;
      D3[3] = 1;
      delay(1000);
    }
    else if (SEQ == 13) {
      lcd.clear();
      lcd.setCursor(0, 0);
      lcd.print("KEY: G,R,B");
      // Set the Disarm steps {R,B,G,Y}:
      //int D0[] = {0,0,0,0}; // Fully armed
      //int D1[] = {0,0,1,0}; // *
      D1[2] = 1;
      //int D2[] = {1,0,1,0}; // **
      D2[0] = 1;
      D2[2] = 1;
      //int D3[] = {1,1,1,0}; // Disarmed
      D3[0] = 1;
      D3[1] = 1;
      D3[2] = 1;
      delay(1000);
    }
    else if (SEQ == 14) {
      lcd.clear();
      lcd.setCursor(0, 0);
      lcd.print("KEY: G,R,Y");
      // Set the Disarm steps {R,B,G,Y}:
      //int D0[] = {0,0,0,0}; // Fully armed
      //int D1[] = {0,0,1,0}; // *
      D1[2] = 1;
      //int D2[] = {1,0,1,0}; // **
      D2[0] = 1;
      D2[2] = 1;
      //int D3[] = {1,0,1,1}; // Disarmed
      D3[0] = 1;
      D3[2] = 1;
      D3[3] = 1;
      delay(1000);
    }
    else if (SEQ == 15) {
      lcd.clear();
      lcd.setCursor(0, 0);
      lcd.print("KEY: G,B,R");
      // Set the Disarm steps {R,B,G,Y}:
      //int D0[] = {0,0,0,0}; // Fully armed
      //int D1[] = {0,0,1,0}; // *
      D1[2] = 1;
      //int D2[] = {0,1,1,0}; // **
      D2[1] = 1;
      D2[2] = 1;
      //int D3[] = {1,1,1,0}; // Disarmed
      D3[0] = 1;
      D3[1] = 1;
      D3[2] = 1;
      delay(1000);
    }
    else if (SEQ == 16) {
      lcd.clear();
      lcd.setCursor(0, 0);
      lcd.print("KEY: G,B,Y");
      // Set the Disarm steps {R,B,G,Y}:
      //int D0[] = {0,0,0,0}; // Fully armed
      //int D1[] = {0,0,1,0}; // *
      D1[2] = 1;
      //int D2[] = {0,1,1,0}; // **
      D2[1] = 1;
      D2[2] = 1;
      //int D3[] = {0,1,1,1}; // Disarmed
      D3[1] = 1;
      D3[2] = 1;
      D3[3] = 1;
      delay(1000);
    }
    else if (SEQ == 17) {
      lcd.clear();
      lcd.setCursor(0, 0);
      lcd.print("KEY: G,Y,R");
      // Set the Disarm steps {R,B,G,Y}:
      //int D0[] = {0,0,0,0}; // Fully armed
      //int D1[] = {0,0,1,0}; // *
      D1[2] = 1;
      //int D2[] = {0,0,1,1}; // **
      D2[2] = 1;
      D2[3] = 1;
      //int D3[] = {1,0,1,1}; // Disarmed
      D3[0] = 1;
      D3[2] = 1;
      D3[3] = 1;
      delay(1000);
    }
    else if (SEQ == 18) {
      lcd.clear();
      lcd.setCursor(0, 0);
      lcd.print("KEY: G,Y,B");
      // Set the Disarm steps {R,B,G,Y}:
      //int D0[] = {0,0,0,0}; // Fully armed
      //int D1[] = {0,0,1,0}; // *
      D1[2] = 1;
      //int D2[] = {0,0,1,1}; // **
      D2[2] = 1;
      D2[3] = 1;
      //int D3[] = {0,1,1,1}; // Disarmed
      D3[1] = 1;
      D3[2] = 1;
      D3[3] = 1;
      delay(1000);
    }
    else if (SEQ == 19) {
      lcd.clear();
      lcd.setCursor(0, 0);
      lcd.print("KEY: Y,R,B");
      // Set the Disarm steps {R,B,G,Y}:
      //int D0[] = {0,0,0,0}; // Fully armed
      //int D1[] = {0,0,0,1}; // *
      D1[3] = 1;
      //int D2[] = {1,0,0,1}; // **
      D2[0] = 1;
      D2[3] = 1;
      //int D3[] = {1,1,0,1}; // Disarmed
      D3[0] = 1;
      D3[1] = 1;
      D3[3] = 1;
      delay(1000);
    }
    else if (SEQ == 20) {
      lcd.clear();
      lcd.setCursor(0, 0);
      lcd.print("KEY: Y,R,G");
      // Set the Disarm steps {R,B,G,Y}:
      //int D0[] = {0,0,0,0}; // Fully armed
      //int D1[] = {0,0,0,1}; // *
      D1[3] = 1;
      //int D2[] = {1,0,0,1}; // **
      D2[0] = 1;
      D2[3] = 1;
      //int D3[] = {1,0,1,1}; // Disarmed
      D3[0] = 1;
      D3[2] = 1;
      D3[3] = 1;
      delay(1000);
    }
    else if (SEQ == 21) {
      lcd.clear();
      lcd.setCursor(0, 0);
      lcd.print("KEY: Y,B,R");
      // Set the Disarm steps {R,B,G,Y}:
      //int D0[] = {0,0,0,0}; // Fully armed
      //int D1[] = {0,0,0,1}; // *
      D1[3] = 1;
      //int D2[] = {0,1,0,1}; // **
      D2[1] = 1;
      D2[3] = 1;
      //int D3[] = {1,1,0,1}; // Disarmed
      D3[0] = 1;
      D3[1] = 1;
      D3[3] = 1;
      delay(1000);
    }
    else if (SEQ == 22) {
      lcd.clear();
      lcd.setCursor(0, 0);
      lcd.print("KEY: Y,B,G");
      // Set the Disarm steps {R,B,G,Y}:
      //int D0[] = {0,0,0,0}; // Fully armed
      //int D1[] = {0,0,0,1}; // *
      D1[3] = 1;
      //int D2[] = {0,1,0,1}; // **
      D2[1] = 1;
      D2[3] = 1;
      //int D3[] = {0,1,1,1}; // Disarmed
      D3[1] = 1;
      D3[2] = 1;
      D3[3] = 1;
      delay(1000);
    }
    else if (SEQ == 23) {
      lcd.clear();
      lcd.setCursor(0, 0);
      lcd.print("KEY: Y,G,R");
      // Set the Disarm steps {R,B,G,Y}:
      //int D0[] = {0,0,0,0}; // Fully armed
      //int D1[] = {0,0,0,1}; // *
      D1[3] = 1;
      //int D2[] = {0,0,1,1}; // **
      D2[2] = 1;
      D2[3] = 1;
      //int D3[] = {1,0,1,1}; // Disarmed
      D3[0] = 1;
      D3[2] = 1;
      D3[3] = 1;
      delay(1000);
    }
    else if (SEQ == 24) {
      lcd.clear();
      lcd.setCursor(0, 0);
      lcd.print("KEY: Y,G,B");
      // Set the Disarm steps {R,B,G,Y}:
      //int D0[] = {0,0,0,0}; // Fully armed
      //int D1[] = {0,0,0,1}; // *
      D1[3] = 1;
      //int D2[] = {0,0,1,1}; // **
      D2[2] = 1;
      D2[3] = 1;
      //int D3[] = {0,1,1,1}; // Disarmed
      D3[1] = 1;
      D3[2] = 1;
      D3[3] = 1;
      delay(1000);
    }
    // Move to next state:
    main_state = 2;
  } // END STATE 1



  // STATE 2 -:
  else if (main_state == 2) {
    // CONFIRM USER WROTE DOWN THE KEY:
    lcd.setCursor(0, 1);
    lcd.print("Press B2 to ARM");
    button_3_state = digitalRead(button_3);
    if (button_3_state == LOW) {
      delay(100);
    }

    else if (button_3_state == HIGH) {
      lcd.clear();
      lcd.setCursor(0, 0);
      lcd.print("ARMED:");
      lcd.setCursor(7, 0);
      //lcd.print(timer_sec);
      timer_min = int(timer_sec / 60);
      timer_sec_remainder = timer_sec % 60;
      if (timer_min < 10) {
        lcd.print("0");
      }
      else {
        Serial.print(" ");
      }
      lcd.print(timer_min);
      if (timer_sec_remainder < 10) {
        lcd.print(":0");
      }
      else {
        lcd.print(":");
      }
      lcd.print(timer_sec_remainder);
      timer_sec = timer * 60;
      timer_fast = timer_sec / 6;
      timer_faster = timer_fast / 3;
      // Move to next state:
      main_state = 3;
    }

  }
  // END STATE 2



  // STATE 3 -:
  // - run timer
  else if (main_state == 3) {
    lcd.clear();
    lcd.setCursor(0, 0);
    lcd.print("ARMED:");
    lcd.setCursor(7, 0);
    //lcd.print(timer_sec);
    timer_min = int(timer_sec / 60);
    timer_sec_remainder = timer_sec % 60;
    if (timer_min < 10) {
      lcd.print("0");
    }
    else {
      Serial.print(" ");
    }
    lcd.print(timer_min);
    if (timer_sec_remainder < 10) {
      lcd.print(":0");
    }
    else {
      lcd.print(":");
    }
    lcd.print(timer_sec_remainder);
    if (D_State == 0) {
      lcd.setCursor(0, 1);
      lcd.print("***");
    }
    else if (D_State == 1) {
      lcd.setCursor(0, 1);
      lcd.print("**");
    }
    else if (D_State == 2) {
      lcd.setCursor(0, 1);
      lcd.print("*");
    }



    if (timer_sec <= 1) {
      main_state = 4;
    }
    else if (timer_sec < timer_faster) {
      digitalWrite(signal_pin, 1);
      delay(50);
      timer_sec = timer_sec - 1;
      digitalWrite(signal_pin, 0);
      delay(200);
      digitalWrite(signal_pin, 1);
      delay(50);
      digitalWrite(signal_pin, 0);
      delay(200);
      digitalWrite(signal_pin, 1);
      delay(50);
      digitalWrite(signal_pin, 0);
      delay(200);
      digitalWrite(signal_pin, 1);
      delay(50);
      digitalWrite(signal_pin, 0);
      delay(200);
    }
    else if (timer_sec < timer_fast) {
      digitalWrite(signal_pin, 1);
      delay(50);
      timer_sec = timer_sec - 1;
      digitalWrite(signal_pin, 0);
      delay(400);
      digitalWrite(signal_pin, 1);
      delay(50);
      digitalWrite(signal_pin, 0);
      delay(400);
    }
    else if (timer_sec > 1) {
      digitalWrite(signal_pin, 1);
      delay(50);
      timer_sec = timer_sec - 1;
      digitalWrite(signal_pin, 0);
      delay(950);
    }


    //- check D_current
    check_D_current();

    if (D_State == 0) {
      if (
        D_current[0] == D0[0] and
        D_current[1] == D0[1] and
        D_current[2] == D0[2] and
        D_current[3] == D0[3]
      ) {
        Serial.println(" ");
      }
      else {
        if (
          D_current[0] == D1[0] and
          D_current[1] == D1[1] and
          D_current[2] == D1[2] and
          D_current[3] == D1[3]
        ) {
          digitalWrite(signal_pin, 1);
          delay(1000);
          D_State = 1;
          digitalWrite(signal_pin, 0);
          delay(50);
          digitalWrite(signal_pin, 1);
          delay(50);
          digitalWrite(signal_pin, 0);
          delay(50);
          digitalWrite(signal_pin, 1);
          delay(50);
          digitalWrite(signal_pin, 0);
        }
        //----- if D_current != D1 -> BOOM
        else {
          digitalWrite(signal_pin, 1);
          main_state = 4;
          delay(1000);
          digitalWrite(signal_pin, 1);
        }
      }
    } // end D_State == 0



    if (D_State == 1) {
      if (
        D_current[0] == D1[0] and
        D_current[1] == D1[1] and
        D_current[2] == D1[2] and
        D_current[3] == D1[3]
      ) {
        Serial.println(" ");
      }
      else {
        Serial.println(D2[0]);
        Serial.println(D2[1]);
        Serial.println(D2[2]);
        Serial.println(D2[3]);
        Serial.println(" ");
        if (
          D_current[0] == D2[0] and
          D_current[1] == D2[1] and
          D_current[2] == D2[2] and
          D_current[3] == D2[3]
        ) {
          digitalWrite(signal_pin, 1);
          delay(1000);
          D_State = 2;
          digitalWrite(signal_pin, 0);
          delay(50);
          digitalWrite(signal_pin, 1);
          delay(50);
          digitalWrite(signal_pin, 0);
          delay(50);
          digitalWrite(signal_pin, 1);
          delay(50);
          digitalWrite(signal_pin, 0);
        }
        else {
          digitalWrite(signal_pin, 1);
          main_state = 4;
          delay(1000);
          digitalWrite(signal_pin, 1);
        }
      }
    } // end D_State == 1



    if (D_State == 2) {
      //--- if D_current == D0 : pass
      if (
        D_current[0] == D2[0] and
        D_current[1] == D2[1] and
        D_current[2] == D2[2] and
        D_current[3] == D2[3]
      ) {
        Serial.println(" ");
      }
      //--- else if D_current != D0:
      else {
        //----- else if D_current == D1 -> D_state = 1
        if (
          D_current[0] == D3[0] and
          D_current[1] == D3[1] and
          D_current[2] == D3[2] and
          D_current[3] == D3[3]
        ) {
          digitalWrite(signal_pin, 1);
          delay(1000);
          D_State = 3;
          digitalWrite(signal_pin, 0);
          delay(50);
          digitalWrite(signal_pin, 1);
          delay(50);
          digitalWrite(signal_pin, 0);
          delay(50);
          digitalWrite(signal_pin, 1);
          delay(50);
          digitalWrite(signal_pin, 0);
        }
        //----- if D_current != D1 -> BOOM
        else {
          digitalWrite(signal_pin, 1);
          main_state = 4;
          delay(1000);
          digitalWrite(signal_pin, 1);
        }
      }
    } // end D_State == 2



    if (D_State == 3) {
      lcd.clear();
      lcd.setCursor(0, 0);
      digitalWrite(signal_pin, 1);
      delay(50);
      digitalWrite(signal_pin, 0);
      delay(50);
      digitalWrite(signal_pin, 1);
      delay(50);
      digitalWrite(signal_pin, 0);
      delay(50);
      digitalWrite(signal_pin, 1);
      delay(50);
      digitalWrite(signal_pin, 0);
      delay(50);
      lcd.print("  BOMB DEFUSED");
      delay(1000000);
    } // end D_State == 3
  } // END STATE 3

  // STATE 4 - BOOM, TERRORISTS WIN:
  else if (main_state == 4) {
    lcd.clear();
    lcd.setCursor(0, 0);
    digitalWrite(signal_pin, 1);
    lcd.print("  BOMB EXPLODED");
    activateRelay();
    delay(5000);
    deactivateRelay();
    delay(100);
    digitalWrite(signal_pin, 0);
    delay(10000);
  } // END STATE 4
} // END LOOP

// Check current bomb wires config:
void check_D_current() {
  R = digitalRead(Red_wire);
  B = digitalRead(Black_wire);
  G = digitalRead(Green_wire);
  Y = digitalRead(Yellow_wire);
  // Print for debug:
  Serial.println("D_current:");
  D_current[0] = R;
  D_current[1] = B;
  D_current[2] = G;
  D_current[3] = Y;
  Serial.println(D_current[0]);
  Serial.println(D_current[1]);
  Serial.println(D_current[2]);
  Serial.println(D_current[3]);
  Serial.println(" ");
}
2

DroneBotWorkshop does a very good job at introducing encoders... accompanying script, video and code...

3

I always try and use this library as it is done correctly. Many libraries do not use a proper state machine like this one.

Rotary Library
from Encoder Library, for Measuring Quadarature Encoded Position or Rotation Signals

For usage see the examples that come with the library.

4

As noted there are multiple encoder libraries out there.  First, experiment with some that look interesting by making a sketch which simply increments, decrements, and resets a number (displayed on the serial monitor).  It'll be simpler this way than trying to shoehorn some encoder code into your existing sketch.

After that it's just substituting a clockwise rotation for an UP button, etc.

Some like to use roll-your-own code for the encoder but that's only another complication, IMO.

5

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