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RE: Did Steemit Inc. just destroy all our images?
That is true and compressing images is definitely a good idea, as @flugschwein pointed out the main reason was apparently saving bandwidth for users. When writing posts for other frontends than steemit.com 640px is not sufficient though.
For sure, although I still prefer looking at a smaller, well compressed image (done by the uploader, not some blurry mess made by a CDN plugin) and then deciding whether I want to see it bigger, such as juliank used to do with his competition winning posts. I think that the bona fide photographers have unfortunately had to pay the price for all those gif wars on drama posts, gifs in post footers and people who don't know any better dumping 5-10 17mb files in a single post