Music stored on your CDs are the full quality sounds. This is great, but they take up quite a lot of room on your computer, so if you want to take your music places in some portable music player, or even just store them on your computer, you'd better have quite a lot of room.
So, as space is usally at a premium (especially in portable players), you have to find a way to get the music on your computer, but so that it takes up less room. This is known as compression, just like taking a spring and pushing it in so it takes up less room.
One way they did this was to take the original music from the CD, and remove any noise that is not between the frequencies of 20Hz-20kHz. This is because this is the human hearing band, and so anything outside this is stuff we can't actually hear anyway. Because they're taking some music out doing this (but nothing humans would notice), it reduces the size it takes up on your computer.
Then they took this constant stream of sound, and separated it, taking out bits of sound every so often. This is like running water through your tap: it's constant. Then, slow your tap down so that it drips. Now, the key is to get it to drip, so that you're removing some of the sound, but make it drip so often that it appears to be a constant flow to our ears. This is taking out bits of music, so it also reduces the size of the music on your computer.
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