Compression
Making a file smaller, either keeping every detail or throwing some of it away.
See it in FX engine. Lower JPEG quality under Post-processing and watch blocks appear.
In plain words
Files are smaller when repeated or unimportant parts are written more briefly. Lossless compression keeps every detail, like writing "seven whites" instead of listing seven whites. PNG works this way. Lossy compression throws away detail the eye is unlikely to miss, like JPEG does with photos. It makes much smaller files, but squeeze too hard and blocks and smudges appear.