Lossless compression is a method of reducing the size of a file without losing any information. This means that when the file is decompressed, it returns to its original state, preserving all the data exactly as it was. Common formats that use lossless compression include ZIP for files and PNG for images.
This technique is particularly useful for text documents, software, and certain types of images where maintaining quality is essential. Unlike lossy compression, which sacrifices some data for smaller file sizes, lossless compression ensures that every bit of information is intact after the process.