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In computer science and information theory, data compression, source coding or bit-rate reduction is the process of encoding information using fewer bits than the original representation would use. Compression is useful because it helps reduce the consumption of expensive resources, such as hard disk space or transmission bandwidth. On the downside, compressed data must be decompressed to be used, and this extra processing may be detrimental to some applications. For instance, a compression scheme for video may require expensive hardware for the video to be decompressed fast enough to be viewed as it is being decompressed (the option of decompressing the video in full before watching it may be inconvenient, and requires storage space for the decompressed video). The design of data compression schemes therefore involves trade-offs among various factors, including the degree of compression, the amount of distortion introduced (if using a lossy compression scheme), and the computational resources required to compress and uncompress the data. (Excerpt from Wikipedia article: Data compression)
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