JPEG and PNG are both compressed image formats, meaning they will build an image that compresses the size of the original image into less information than the original. The difference between the two is that PNG uses a lossless compression algorithm, meaning the new compressed image is the same as the original, only smartly packed into a smaller file, while JPG uses a compression algorithm that can destroy some of the information in the original picture. With PNGs, there is a limit to how much you can compress the image without causing losses, but with JPGs, image files can be arbitrarily small, depending on how much loss you are comfortable with, making it specially good for online transmission, especially in the early days of slow data transfer speeds.
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