An artifact is a quantifiable deviation from the original article in question, this can come about through cheap and nasty cables, through bad amplifiers, or an incorrectly set up display device. A compression artifact is the result when you apply lossy compression to a file, is the noticable difference from the original to the compressed file when decoded.

Examples :

Applying lots of compression to a JPEG format file will cause you to notice the difference if there is a large frequency difference between neighbouring pixels. In short, it looks blockier than before. See JPEG artifacts for more info.

MP3 compression, using a low bitrate causes the encoding algorithm to throw away more frequencies to reconstruct the sound. The result is that it sounds "tinnier" than before, since it loses high-frequency information as part of the perceptual compression. Some other nodes of information are How audio compression works, and MP3 Compression Codec

MPEG and MPEG2 compression if the bitrate is not significantly high, will cause blocking and dot crawl in the decoded video.

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