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If you have a detailed image, such as a photograph, then optimised JPEGs are the way to go. The compression method can be tailored to suit your needs by balancing image quality and file size.
If you have an image which is made up of defined areas of solid colour, and you would like to make the background transparent, then GIFs should be used.
If, in this case, you want to make a relatively simple image appear with no deformation of pixelation then use PNGs. They use a similar technology to GIFs, and can capture crisp edges without creating a huge file. But, they are only useful for images which aren't comprised of too many elements, as file sizes rise pretty steeply with more detail.
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