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.