Back in the dialup days, images loaded VERY slowly, so it was pretty desirable to start with a low resolution version of the image before filling in the details. It lets you decide whether or not you want to wait several minutes for the whole image before leaving the page.
The technique in general is called interlacing, and is a function of the image format. Nowadays it doesn’t really matter so much, as even a full screen image can load in a fraction of a second with good image quality.
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