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This section discusses working with PNG images, highlighting their advantages compared to JPEGs and GIFs. While the JPEG format wasn't suitable for a particular image, a GIF provided a decent result with 126 colors, achieving a size of 3.15 k. It also touches on the dither algorithm, which affects the image's quality by controlling the amount of dither applied. A higher dither setting can increase the image size, whereas a lower setting, such as 50%, shows minimal impact in this scenario. Overall, PNG is presented as a strong option for this type of work due to its capabilities.