The mostly used picture formats are JPEG (or JPG) and GIF which are widely used on the web. Here JPEG is a lossy based image compression method which uses the discrete cosine transform (DCT) and the quantization to store the image information. It works best on natural images (photos like the left picture).

Whereas GIF is a colour palette based compression method which can only keep up to 256 colours in a specified colour look up table to represent all colours of the image. But GIF format can support one transparent colour (see upper right picture) and animation (lower right picture).

There are also some other types of format. You can check the table next to get more information.