Gzip reduces the size of the named files using Lempel-Ziv coding (LZ77).the program documentation
Gzip uses the Lempel-Ziv algorithm used in zip and PKZIP. The amount of compression obtained depends on the size of the input and the distribution of common substrings. Typically, text such as source code or English is reduced by 60-70%. Compression is generally much better than that achieved by LZW (as used in compress), Huffman coding (as used in pack), or adaptive Huffman coding (compact).
Compression is always performed, even if the compressed file is slightly larger than the original. The worst case expansion is a few bytes for the gzip file header, plus 5 bytes every 32K block, or an expansion ratio of 0.015% for large files. Note that the actual number of used disk blocks almost never increases. gzip preserves the mode, ownership and timestamps of files when compressing or decompressing.
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