GIF, JPG, PNG

Now that you know something about RGB color, and lossy compression, you are ready to understand differences between common image formats. Many of these differences revolve around differences in compression and how color is handled.

Here I compare the three most common image formats in use today. Each has advantages and disadvantages.
GIF (pronounced with a soft g, like JIFF peanut butter) was introduced in 1987. It stands for Graphics Interchange Format.
JPG was introduced in 1992 and stands for Joint Photographics Experts Group. The acronym is often shortened to 3 letters.
PNG, introduced in 1996, is open-source. Officially, it stands for Portable Network Graphic, but unofficially it stands for "png’s not gif". As the official and unofficial names suggest, PNG is especially well suited to the network, rather than print, and was designed to replace the proprietary GIF format. In addition to providing an open source alternative to GIF, PNG supports an unlimited number of colors and is suitable for color photographs.

Compression

JPG supports an unlimited number of colors suitable for color photographs. However, every time you modify and save a JPG image, the quality degrades because of the lossy compression. If you are saving artwork to work on later, PNG is the best format because you do not lose any quality.

File size

A benefit of JPG's lossy compression algorithm, is that it achieves file sizes about one-fifth the size of a comparable PNG. However, a benefit of GIF is that it readily supports transparency and animation, neither of which are supported by JPG. PNG offers full and partial transparency, which improves on GIF. However, PNG's animation is not as widely supported as GIF.

Indexed Color vs True Color Images

We will discuss two methods of assigning color to images: indexed color is used by GIF, and true color is used by JPG. Both are supported by PNG.

Indexed color uses a palette (LUT: Lookup Table). The LUT can be drawn from a color space of millions of shades but the maximum number of colors the image can use is 256. So, each color is associated with a number.
True color uses three channels, Red, Green, and Blue, to encode the images. Each channel is implemented as a separate layer (a separate greyscale image), which technically makes a true-color image "3-D" (though it looks 2-D)! JPEG uses true color.
PNG supports either indexed or true color.
You can use ExifTool to learn about the characteristics of any common image formats.

Watch this 10-minute video clip comparing the different image formats.

DSP 2: Signal Compression, Color Images (~45-Minutes)