If I have the string “0000000000” in a file. The program doing the compression may replace this with a shorthand like “0x10″*. No information was lost, we still know what the original data was. However, *other programs* don’t understand the shorthand the compression algorithm used. They don’t know “0x10” is supposed to mean “0000000000”.
*Obviously, the computer wouldn’t compress it to something human readable like this, but this is just an example.
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