Minidisc historically used a lossy compression scheme called ATRAC similar to mp3 but did not attempt to reduce more than 5:1 whereas default mp3 compression was 11:1. It sounded much better than mp3 at that time.
My recorder is "Type R" which I believe is the last ATRAC encoder improvement (the later Type S was an ATRAC3 decoder improvement IIRC). I can tell it isn't perfect but it's extremely good. Using MD as it was intended (a replacement for compact cassette), the quality is astounding.
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