Huffman coding
From ScienceZero
A simple way of reducing the size of a block of data is to replace the most common words with shorter ones that are not already used in the data. It is possible to reconstruct the original data using a dictionary that lists the short words and the longer words they replace.
The problem is to decide which codes to use, David A. Huffman found the optimal way of generating codes that guarantees the shortes possible output.