Digital Data Compression
Many image file formats use data compression to reduce file size and save storage space. Digital compression of images may take place in the camera, or can be done in the computer with the image editor. When images are stored in JPEG format, compression has already taken place. Both cameras and computer programs allow the user to set the level of compression.
Some compression algorithms, such as those used in PNG file format, are lossless, which means no information is lost when the file is saved. By contrast, the JPEG file format uses a lossy compression algorithm by which the greater the compression, the more information is lost, ultimately reducing image quality or detail that can not be restored. JPEG uses knowledge of the way the human brain and eyes perceive color to make this loss of detail less noticeable.
Read more about this topic: Image Editing
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