A system of applying a parity bit to protect transmitting and receiving data includes a transmitting-end device and a receiving-end device. The transmitting-end device includes a parity generator, a first parity location generator and a parity inserting unit which, when transmitting data, inserts a parity bit in the data to thus generate an encrypted data. The receiving-end device includes a second parity location generator and a parity removal unit that receives the encrypted data and removes Nth bit of the encrypted data in accordance with an inserting position N generated by the second parity location generator.