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gzip is a popular lossless file compression tool that reduces the size of data by identifying repeated patterns in a file and replacing them with metadata or shorter sequences. This helps to minimize the amount of bits needed to represent the information without losing any data. Developed in 1992 by Jean-Loup Gailly and Mark Adler, gzip was created in response to existing compression technology patents held by big tech corporations. Unlike lossy compression algorithms like JPEG, gzip ensures that no information is lost during the compression process.