In computer science and information theory, data compression, source coding, or bit-rate reduction involves encoding information using fewer bits than the original representation. Compression can be either lossy or lossless. Lossless compression reduces bits by identifying and eliminating statistical redundancy. No information is lost in lossless compression. Lossy compression reduces bits by identifying marginally important information and removing it.

Compression is useful because it helps reduce the consumption of resources such as data space or transmission capacity. Because compressed data must be decompressed to be used, this extra processing imposes computational or other costs through decompression. 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, and the option to decompress the video in full before watching it may be inconvenient or require additional storage. The design of data compression schemes involve trade-offs among various factors, including the degree of compression, the amount of distortion introduced (e.g., when using lossy data compression), and the computational resources required to compress and uncompress the data.

Claude Elwood Shannon (April 30, 1916 – February 24, 2001) was an American mathematician, electronic engineer, and cryptographer known as "the father of information theory".

Shannon is famous for having founded information theory with one landmark paper published in 1948. But he is also credited with founding both digital computer and digital circuit design theory in 1937, when, as a 21-year-old master's student at MIT, he wrote a thesis demonstrating that electrical application of Boolean algebra could construct and resolve any logical, numerical relationship. It has been claimed that this was the most important master's thesis of all time. Shannon contributed to the field of cryptanalysis during World War II and afterwards, including basic work on code breaking.

Shannon was born in Petoskey, Michigan. His father, Claude Sr (1862–1934), a descendant of early New Jersey settlers, was a self-made businessman and for a while, Judge of Probate. His mother, Mabel Wolf Shannon (1890–1945), daughter of German immigrants, was a language teacher and for a number of years principal of Gaylord High School, Michigan. The first 16 years of Shannon's life were spent in Gaylord, Michigan, where he attended public school, graduating from Gaylord High School in 1932. Shannon showed an inclination towards mechanical things. His best subjects were science and mathematics, and at home he constructed such devices as models of planes, a radio-controlled model boat and a wireless telegraph system to a friend's house half a mile away. While growing up, he worked as a messenger for Western Union. His childhood hero was Thomas Edison, who he later learned was a distant cousin. Both were descendants of John Ogden, a colonial leader and an ancestor of many distinguished people.