Data compression is the process of reducing the size of a file or dataset by encoding information more efficiently. This can be achieved through various techniques that eliminate redundancy, allowing for faster transmission and storage. Common methods include lossless compression, which preserves all original data, and lossy compression, which sacrifices some data for greater size reduction. Compressed data is widely used in various applications, such as image files (like JPEG), audio files (like MP3), and video files (like MP4). By minimizing file sizes, compression helps save storage space and improves the speed of data transfer over networks, making it essential in today's digital world.