Don’t get me wrong, the idea behind it is sound but it got overhyped and misapplied. Of course I’m talking about one of an early attempts at lossy image compression called block truncation coding, what did you think about?
For those who forgot about it (and is too lazy to read its description), the method replaces values in a block with two values below/above block mean value using that mean value, standard deviation and that number of values that were above the mean value. This algorithm is often quoted as being the one on which many video codecs (especially the ones used in various games but some standard ones like Micro$oft Video 1 and A**le Graphics(SMC) and Video(RPZA) as well) are built. And that part is a bullshit which many used to believe mostly because nobody who heard it took any time to evaluate that statement (I was no exception).
Actually I should’ve started doubting it much earlier as I’ve tried to apply it to colour quantisation (like in Video 1 encoder) and failed. The method is applicable to scalar values only (and pixels are vectors of three components in our case, you can map them to greyscale but how would you calculate two distinct colours to segment block into?) and its results are worse than using Linde-Buzo-Gray method for vector quantisation (which was presented in the paper the following year). Wikipedia has an article describing a proper image compression algorithm proposed in 1986 called color cell compression that definitely looks like the perfect candidate for all the following codecs: it describes compressing image by splitting it into 4×4 tiles, grouping pixels in those tiles using average luminance as the discriminator and calculating two colours to paint the tile as averages of those two groups. That’s how vector quantisation works and unlike BTC it does not require calculating square roots and can be implemented trivially using integer maths only. So it’s practical, gives better results (in terms of MSE of greyscale images when compared to BTC) and works on actual pixel data.
While BTC was innovative for its time and probably an important stepping stone for further methods, its relevance to the modern compression schemes is minimal (unlike colour cell compression) and calling it the base for the codecs with two-colour vector quantisation is as stupid as calling Cyrano de Bergerac the father of space flight because he mentioned travel to the Moon using gunpowder rockets in a novel of his.