Files with the .JP2 extension contain a compressed bitmap image creating using JPEG-2000 Core Coding. It is different from standardized JPEG files in that it uses a different type of algorithm during compression – one based on discrete wavelet transform – this allows for a non-lossy compression.

Even though JP2 files, also known as JPX files, create a slightly higher quality image than JPG files at a comparable level of conversion and allow for data interlacing, meaning that as the image is being processed, the quality displayed gradually increases, they will not replace JPEG files due to their much higher computational complexity.