This lesson shows why compression saves storage and bandwidth. We start with a file containing repeated words. Checking its size shows 24 bytes. After compressing with gzip, the file size reduces to 16 bytes. This smaller size means it uses less storage space and less bandwidth when sent over a network. Decompressing restores the original file fully, proving compression is lossless. Compression works by finding repeated patterns and storing them efficiently, which is why repeated words compress well. If data has no repetition, compression saves less space. Overall, compression helps save resources by reducing file sizes.