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A new and improved image coding standard, called JPEG2000, has been developed. JPEG2000 is the state-of-the-art image coding standard that results from the joint efforts of the International Standards Organization (ISO) and the International Telecommunications Union. In this article, we describe the most important parameters of this new standard and present several "tips and tricks" to help resolve the design tradeoffs that JPEG2000 application developers are likely to encounter in practice. The new standard outperforms the older JPEG standard by approximately 2 dB of peak signal-to-noise ratio (PSNR) for several images across all compression ratios. The JPEG2000's superiority from the previous standard largely depends on the standard's security aspects, interactive protocols and application program interfaces for network access, wireless transmission, wavelet transform, and embedded block coding with optimal truncation (EBCOT).