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In this video, we explore how PNG, a widely used image file format, compresses images while perfectly preserving original quality across websites. Unlike JPEG, which can distort images, particularly those with vector graphics or text, PNG avoids such issues by employing lossless compression. The video discusses PNG's clever extension of core ideas from various text compression algorithms seen in ZIP files. However, despite the ingenuity of these algorithms, their complexity and slowness may become apparent when applied to images.