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's 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.
This is an example of lossless data compression. It is often used to optimize disk space on office computers, or better use the connection bandwidth in a computer network. For symbolic data such as spreadsheets, text, executable programs, etc., losslessness is essential because changing even a single bit cannot be tolerated (except in some limited cases).
These lossy data compression methods typically offer a three-way tradeoff between compression speed, compressed data size and quality loss.
Arithmetic coding, invented by Jorma Rissanen, and turned into a practical method by Witten, Neal, and Cleary, achieves superior compression to the better-known Huffman algorithm, and lends itself especially well to adaptive data compression tasks where the predictions are strongly context-dependent. Arithmetic coding is used in the bilevel image-compression standard JBIG, and the document-compression standard DjVu. The text entry system, Dasher, is an inverse-arithmetic-coder.
Source: Wikipedia > Data Compression
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