We see animated GIF images every day and in varying degrees of quality. Some are looped quite well and appear to be never-ending while some are jerky, pixellated wastes of storage space on a hard drive somewhere.

GIF (Graphic Interchange Format) images have existed for over thirty years and is a graphics format that not only supports a single image, but can also be used to string several images together into a 'flip book' type of animation.

JPEG has been around in various iterations since 1992 and the Joint Photographic Experts Group was in the process of defining what the JPEG format should be, but when it was decided on as the 'new internet standard', few programs provided JPEG or JFIF support and the common internet user or developer had little use for it.

GIF was the 'standard' when the WWW was first getting started, mostly thanks to Compuserve. At the onset of the WWW, services such as Compuserve and America Online were also competing to be your 'internet platform' and Compuserve used the GIF format for most of their graphics and since it was easy to work with, supported by the internet and easily supportable by browsers, GIF became the de facto graphics format, even though nothing was written in stone.

Then Unisys decided to charge a licensing fee on its compression algorithm at the core of the GIF picture format. That meant any program that provided any level of GIF encoding or decoding needed to pay Unisys $1 per software copy (if I remember correctly). 

Since graphics programs could charge for their products, that was OK because they could easily disable GIF support in their shareware versions and charge enough for the 'retail' version to pay Unisys. But for programs like browsers such as Netscape, the first iterations of Internet Explorer, etc. their makers would all owe Unisys big bucks simply because they used part of the algorithm to decode the GIF images. That wasn't going to work. 

JPEG wasn't very popular, basically because the group over it were taking forever to settle on a final definition of their new picture format. The main problem was, the compression algorithm used meant that the proposed JPEG format was a 'lossy' format which meant that when you saved the final product, all of the original image wasn't there. A smaller file size, granted, but with a possibly perceivable loss in quality. The governing board was trying to find a way to create a less lossy or even a lossless format before creating a new standard, so JPEG files were basically experimental at that point because it wasn't seen as being superior to other file types that already existed. Such as GIF.

GIF is a 'lossless' compression which meant that when you save an image, it saves everything in the original image. Plus, with the way GIF files are constructed, it was possible to have multiple images strung after each other, much like frames of film in a movie projector (Google it if you have to) to create motion, or animation. 

The drawback to the 'lossless' compression is the fact that file sizes are much, much larger. A 40 kilobyte (40k) JPEG could easily be 150k to 300k as a GIF. And animated GIF files are even larger which is why Imagefap has a 25 meg limit on them. Unfortunately, that means the amount of animation in a GIF file is limited to usually only a couple of seconds. 

So, GIF images were easy to create, quality as good as it could possibly be thanks to the lossless compression and it was not only available but based on file sizes and quality, GIF was the 'best'.

That's why Compuserve first started using GIFs as its core graphics format and the rest of the WWW followed suit. Unfortunately, in the late 1990's when the internet was just starting to take off, Unisys decided they wanted to get some money out of their intellectual property before the patents expired in just a few years.

GIF was essentially the only graphics format websites and platforms like AOL and Compuserve used and thanks to the overwhelming influence that placed on the WWW, everything was GIF based when it came to images. It was a core piece of how the internet functioned and when Unisys said "pay up", the entire internet sat up and took notice. 

The resulting panic forced the Joint Photographic Experts Group to finalize a lot of things they'd been dawdling over. All of a sudden, there was a definitive need for a new picture format that wasn't going to cost software developers, and eventually the end users, hundreds of millions, if not eventually billions of dollars. So the JPEG format was released as a free standard only a couple of months after Unisys was to start collecting royalties. 

Granted, there were other image formats such as BMP and PNG as well as a whole host of other lesser used ones, but basically all of them created much bulkier files than JPEG and the quality simply wasn't as important as how fast a file could download over a 28.8k modem. (Think kilobits per seconds instead of megabits per second and you'll figure it out. A modern Imagefap page could take upwards of a minute to load.)

And while graphics programs could work with these files, most browsers didn't support many different image formats which limited their appeal and their ability to replace the GIF format. However, since JPEG was a standard under proposal, browsers actually provided some JPEG support, even though no one really used it.

This meant JPEG had huge benefits compared to everything else. If GIF hadn't been adopted and used by Compuserve for years and its use had become so widespread on the WWW, the internet world may never have had one of its core functions so blatantly threatened, especially if the JPEG consortium had moved sooner. However, that's neither here nor there because Unisys suddenly seemd to have a lock on the main graphics format used online and for those in the internet world, this was a real problem. 

JPEG came to the rescue by defining a standard that most browsers already supported and the internet world sighed in relief. The problem was, some of the current popular graphics programs didn't support the new JPEG standard because it had never been decided on. There were some programs that provided provisional support, but they had to provide support for multiple JPEG formats since those were the formats under discussion.

Some sub-formats were better at compression but the quality was worse while some were the opposite so there were 'candidates', but no true 'standard' until 1998. When Unisys tried to leverage their compression algorithm and the World Wide Web became the place where people didn't even know if they could legally display GIF images, the Joint Photographic Experts Group ratified their 'new standard' in a hurry to settle on a single JPEG format. So, the internet had a new graphics format whether it wanted it or not.

But, that was actually a very good thing since JPG files are always much, much smaller than GIF files and truth be told, if you were seeing a picture online for the first time and had no original to compare it to, the quality loss was unnoticable.

And for 90% of everything online, that turned out all well and good. The main drawback, aside from those who claim they can see the difference between a JPEG and a GIF is there is no possible way to animate a JPEG. Granted, there are movie CODECs that do base their compression on JPEG and variants, but those are totally different file formats and require different software support to decode, especially since for movies, you have to have audio support as well.

The browsers and graphics programs were updated to provide better JPEG support (or support period if they didn't have it before hand) and life on the internet went on. Without GIF pretty much. Unisys relented on programs that simply displayed GIF images since there were so many already in existence, but still wanted to charge for programs that would save in a GIF format. 

Some companies paid, some companies didn't, some companies didn't provide GIF support and life went on. After Unisys' patents expired in 2004. the GIF compression algorithm became public domain and Unisys couldn't charge any longer, but the damage was done. The interenet had moved on with JPEG as it's main graphics format. 

However, for anything requiring animation such as catching the eye with a banner ad or providing small sections of video, the animated GIF is still the only real way to do it. Other companies developed ways to create 'animated' files as well and with varying degrees of success and most of these wound up owned by Adobe (Flash, Shockwave, etc), but they weren't always supported, Adobe was very proprietary which meant paying royalties, etc.

But with the axe that Unisys held over the figurative neck of the internet, these were acceptable circumstances because there were choices there and no one was being forced to pay for something that used to be free. Unless they chose to.

Unfortuantely for Unisys, they tried to monetize a core asset of the internet and the internet rebelled. That's why JPEG images are the vast majority of images displayed and downloaded online and why devices like smartphones and cameras all use JPG as their default format to save pictures in.