Anti-aliasing models a higher color depth by βblendingβ colors in a specific palette to create the illusion of a color that does not actually exist. In fact, it does the same thing your computer monitor already does: color, decomposing it into primary colors and displaying them next to each other. Your computer monitor does this with variable intensities of red, green, and blue, while anti-aliasing does this with a set of colors with a fixed intensity. Since your eye has a limited resolution, it sums up the inputs and you perceive the average color.
In the same way, a newspaper can print grayscale images by smoothing black ink. They do not need many intermediate grays to get a decent grayscale image; they simply use small or large dots of black ink on the page.
When you smooth the image, you lose information, but your eye perceives it basically the same way. In this sense, it is a bit like JPEG or other lossy compression algorithms that discard information that your eye does not see.
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