Compression Definition
There are two types of compression: lossy and lossless.
Lossy file compression, like JPEG for instance, means that files get reduced in size by removing information stored in them, thus losing details. The information lost while compressing a file this way can never be restored.
Lossless compression, on the other hand, preserves all the details in the images. The TIFF file format, among others, uses lossless compression.
Although the JPEG format is lossy, it’s the most popular in digital photography, mainly because of the size of the files. Professional and serious amateur photographers, on the other hand, don’t use it exclusively; they use the RAW format for the serious stuff.