Abstract: A system of compressing streaming digital data for transmission from a computer to a remote computing device over a network is described. An encoding process in the computer compresses pre-stored or live streaming data consisting in a series of frames for transmission to the remote computing device. The encoding process compares a first frame of data within the streaming digital data to a second frame of data within the streaming digital data, the first and second frames comprising one or more bytes of data. A horizontal bit is set to a first logical value for each bit that differs in a byte of the first frame from a corresponding bit in the corresponding byte of the second frame, and a vertical bit is set for each byte in which a horizontal bit value is set to the first logical value. The vertical and horizontal bit information, along with the data for the second frame is transmitted to the remote computing device.