The process of data compression is used to reduce the size of data files, making them easier to store and transmit. This is essential for optimizing storage space and enhancing transfer speeds over networks, such as when sharing large media files or streaming content. Compression algorithms, like ZIP or JPEG, can significantly decrease file sizes without substantially compromising quality. Various techniques may be used, including lossless compression (retaining all original data) and lossy compression (discarding some data to achieve higher reductions).