Zip is a widely used file-archiving format that is used to compress one or more files in one place, thereby reducing their overall size and simplifying data transfer. Zip files basically work the same way as a standard folder on your computer. However, when you use zipped files, the contents of the folder are compressed, which reduces the amount of data your computer uses. Zip files encode information into fewer bits, thereby reducing the size of the file or files by removing excess data. This is called "lossless data compression," which ensures that all original data is preserved.