It turns out that the human auditory system is not an instrument that scoops up all the frequencies in a given environment, like a microphone does. What we “hear” is not an accurate representation of reality, but only those sounds that the brain, over the course of millenia of evolution, has determined to be the “most important” sounds. By stripping out the unnecessary (because they were unheard) noises in a sound file, music files could be made much smaller. Most music was easily compressed and a listener was none the wiser.
