Files that end in the filename extension ".gif" are Graphics Interchange Format files and are commonly referred to as "GIF files," the term usually being pronounced with a soft "G." GIF is a graphic file format, which CompuServe introduced in 1987, that relies upon a compression scheme that doesn't lose any data when the file is saved. The palette of a GIF file is limited to only 256 colors, but the format's small file size makes it useful for line art, especially when intended for download.
GIF files quickly became popular because their data compression scheme, called LZW, enabled large graphic files to be downloaded in a fairly short time, even with slow modem speeds. The format is well-suited for images based on solid colors, such as logos. GIF files represent one of the first two file formats to enter into common use on websites and the only one of the two that supported color. The format is also attractive for its ability to display simple animations with the control data stored within the same file as the images. Because of their 256-color palette limitation, however, GIF files are not well-suited as a format for scanned full-color photographs and other true-color images, which can appear "posterized" as a result of the palette reduction.