Bitmaps and Vectors

Bitmaps use pixels to display an image. Today we use 24bits per pixel so we can create around 16 million different colours, this is called true colour and is as many colours as we can see with our eyes. The problem with bitmaps is if we use less pixels the images quality gets dramatically worse, so the less pixels we use the worse the resolution is if its the same screen size. Bitmap graphics also take up more memory compared to vector graphics and suffer scaling problems which vector graphics do not.
Vector graphics do not suffer from scaling problems because they are made from a drawing list, this is the geometric information and properties needed to recreate the image. Vector graphics are no good for photos from cameras etc because the camera can't see the image being drawn so has no drawing lists.
Because they use drawing lists instead of pixels the file size of a vector graphic is very small in comparison to a bitmap. This also helps them to load faster from storage.
Lossless compression is a method of reducing the file size but not loosing any information and little quality. This includes telling the computer the number of blocks that are the same colour and grouping them together rather than writing the information for each individually. This is called RUN LENGTH ENCODING (RLE).
The other method is called lossy compression which is removing bits of an image that we won't notice are missing.