[duped]

> Dithering is a technique which allows you to represent a color image with a very limited palette, in particular a two bit palette.

To be way more pedantic, dithering is a technique to reduce the quantization error (what happens when you map values from a big, possibly infinite set to a smaller, finite set). This is done whenever a system or algorithm converts data from higher dynamic range representation (more bits per quantum of signal, like a pixel or audio sample) to a lower dynamic range representation, it's called a bit-depth reduction.

And like you alluded to, every compression algorithm that might find it worth it to do this will do it internally. However the benefits are great, since lowering the bit depth has pretty awful results on quality.

Bit-depth reduction is used in practice in a few places, I'm not well versed in image compression but you do see it in telephony.

[omegalulw]

> This is done whenever a system or algorithm converts data from higher dynamic range representation (more bits per quantum of signal, like a pixel or audio sample) to a lower dynamic range representation, it's called a bit-depth reduction.

You are mixing two things here? Bit depth reduction is a specific term, it refers to the reduction in the amount of information you want to _convey_.

Compression is be reducing the number of bits/pixel averaged across the whole image. Good compression algorithms will not be spatially uniform, it's entirely possible that pixels in some parts of the image are compressed with more bits/pixel than pixels in other parts.

[duped]

I took care not to conflate the two and to isolate the terms outside the context of compression, and image processing at large.