The document describes the LZ77 data compression algorithm. It uses a sliding window approach where the text is searched for matches within a search buffer. When a match is found, it is encoded as an offset and length rather than encoding the full text. This allows duplication or repetition within the text to be replaced with smaller and more efficient offset/length codes. An example is provided to demonstrate how the text "sir sid eastman easily teases sea sick seals" would be encoded using this approach.