Compression seems mysterious, but it is a very simple concept. In one type of lossless compression, for example, the computer reads every pixel in an image and then notes which pixels are the same color and their position. Then it saves the image with that information instead of saving every single pixel; this results in a drastic reduction in size. The more complicated the image, the less this kind of compression can compress. The less complicated, the more easily a picture can be reduced in size.

Because a compressed file takes up less space, you can fit more image files on your internal flash memory. Compression is essential with digital photography because without it you would not be able to save many pictures on your memory cards.

The most popular compression format is JPG or JPEG. This uses a very sophisticated computer algorithm to remove colors than are not seen by the human eye. However, this compression method changes the image so that it does lose digital detail. As a result, the compression method is called lossy compression.