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Gzip is a popular lossless file compression tool that reduces the size of large chunks of data on a computer by identifying repeated patterns and replacing them with shorter sequences or metadata. This helps in minimizing the total amount of bits needed to represent the information without losing any data. Unlike lossy compression algorithms such as JPEG, gzip retains all the original information. Developed in 1992 by Jean-Luc Gailly and Mark Adler, gzip was created as an alternative to existing compression technology that was patented by big tech corporations.