The sliding-window Lempel-Ziv algorithm is asymptotically optimal

The sliding-window version of the Lempel-Ziv data-compression algorithm (sometimes called LZ '77) has been thrust into prominence recently. A version of this algorithm is used in the highly successful “Stacker” program for personal computers. If is also incorporated into Microsoft's new MS-DOS-6. Although other versions of the Lempel-Ziv algorithm are known to he optimal in the sense that they compress a data source to its entropy, optimality in this sense has never been demonstrated for this version. In this self-contained paper, we will describe the algorithm, and show that as the “window size,“ a quantity which is related to the memory and complexity of the procedure, goes to infinity, the compression rate approaches the source entropy. The proof is surprisingly general, applying to all finite-alphabet stationary ergodic sources