About JPG and PNG
JPG is the long-standing lossy photo format. It compresses smooth gradients and photographic detail well, but it has no transparency and shows artifacts around sharp edges at lower quality settings.
PNG is lossless with full alpha support. Screenshots, UI assets, and anything with sharp edges or text stay pixel-perfect — the tradeoff is large files for photographs.
Converting JPG to PNG is lossless — pixels come through exactly as they were. Files are converted on the fly and never stored.