Why a Compressed Image Looks Blurry or Blocky
Blurriness or blocky artifacts appear when compression is set aggressively enough to discard visual detail the algorithm judges as less important — pushing file size down too far for a given image trades away real visual quality, and the fix is backing off the compression level until artifacts are no longer visible at normal viewing size.
Compression artifacts are a direct, visible consequence of the file-size-vs-quality trade-off, not a sign something went wrong with the tool.
How lossy compression actually works
Common formats like JPEG use "lossy" compression, meaning some image detail is permanently discarded to reduce file size — at moderate compression levels this is invisible to the eye, but pushed too far, it produces visible blockiness (especially in areas of fine detail or sharp color transitions) or a generally blurred, smudged appearance.
Finding the right balance
There's no single correct compression setting — it depends on the image content and how it'll be viewed. A photo with lots of fine detail shows artifacts more readily than a simple graphic with large flat color areas at the same compression level. Comparing the compressed result against the original at actual viewing size (not zoomed in) is the most reliable way to judge whether a setting is too aggressive.
When a different format avoids the problem entirely
For images where sharp edges and text matter (screenshots, logos, diagrams), a lossless format like PNG avoids compression artifacts entirely, at the cost of a larger file size than an equivalent JPEG — choosing the right format for the content type is often more effective than fine-tuning a lossy compression level.