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In JPEG (DCT based) compresses image data by representing the original image with a small number of transform coefficients. It exploits the fact that for typical images a large amount of signal energy is concentrated in a small number of coefficients. The goal of DCT transform coding is to minimize the number of retained transform coefficients while keeping distortion at an acceptable level. In JPEG, it is done in 8X8 non overlapping blocks. It divides an image into blocks of equal size and processes each block independently. Block processing allows the coder to adapt to the local image statistics, exploit the correlation present among neighboring image pixels, and to reduce computational and storage requirements.
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