Compression, on the other hand, refers to maximizing your storage space, rather than altering the image during its creation. When you have a file, one option is to can compress it using an outside utility, such as StuffIt or Zip. These programs do not mess with the data in your file, they simply pack down the binary code into something that takes up less space. The only thing about this kind of compression is that you need the extra utility to compress and decompress your file. But you can do this with any kind of file, not just graphics.
Graphical compression refers to choosing one file format over another.
Each type of image format stores the data in different ways. As such, some kinds of storage have larger file sizes than others, and some also lose bits of data along the way. GIF takes the binary code that makes up the image and looks for patterns in it. It can take patterns and represent them as a symbol instead, saving file space. This compression tends to work best with images that have patches of solid color or patterns.