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PNG is a newer format that was developed to provide the same benefits that GIF did but offer more flexibility. It is possible to have a paletted or grayscale or true colour PNG file.
=== JPEG ===
This format provides lossy compression that is very good for images with lots of colour variation such as photographs.
The algorithm itself is too complicated to explain, just know that the data is stored in 8x8 pixel blocks.
You can compress a JPEG file more or less depending how high the quality is set to. In a way this is similar to palleting where you drop the number of colours, but here the result is a choppier image for lower quality.
== Transparency ==
Most vector image types and some raster image types (GIF & PNG) support transparency. That is an extra colour setting where a pixel is set to be transparent instead of beeing a certain colour.
In a palleted image the transparent colour is actually a real colour that is designated as transparent, and the viewing software makes sure that it does not display that colour. This is how it works for GIF files.
PNG files can have a transparent colour or an alpha channel - that is each pixel can be partially transparent and the viewing software composites (merges) the contents of the image with the contents of the background. This is more expensive in terms of space required but can produce much prettier results.
== Converting Between Types ==
As with most other kinds of data - images can be converted from one type of data to another. This can be done for compression or compatibility purposes.
Converting from one lossless format to another can be done without loss of information (that's what lossless means). Unfortunately it's slightly more complicated than that. Here are some table to help you see the bigger picture:
Images with up to 255 colours and a transparent colour:
|| From/To || BMP || GIF || PNG || JPEG
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