A compression artifact is the fuzz or distortion in a compressed image or sequence of video images. When a photo is compressed into a JPEG format, some data is lost, which is why this type of compression is called lossy compression. The data that is lost is considered to be not necessary for the viewer to perceive or perhaps not perceivable in any case. In creating a JPEG, if you wish to have a smaller file size regardless of quality, then the result may introduce perceivable compression artifacts. However, if you wish to maintain the quality of the photo and have a larger file size, then the viewer may not notice any artifacts. Artifacts are more evident on a computer image than in a printed photograph.
A digital video file is also compressed and, depending on the amount of compression, may present artifacts. A digital video file has the same fuzzy edges and distortion of images as a still image (JPEG) file may have. The break up of the video into large digital pixels and jerkiness in the video stream are examples of compression artifacts.