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Efficient coding of extremely low-resolution video has received a mere shadow of the attention given to their high-definition counterpart. However, low-resolution video still proves suitable for video processing and may enable the design of advanced video-based applications in a cost-effective manner. Indeed, visual sensors with modest frame resolutions can be designed to be small, low-cost and low-power. This paper introduces a novel efficient codec, specifically designed to handle extreme low-resolution video captured by such visual sensors. By applying Wyner-Ziv coding principles, the encoding complexity is reduced since temporal redundancy is exploited at the decoder. The proposed system outperforms H.264/AVC Intra and is therefore particularly attractive to wireless, resource-constraint low-resolution visual sensor applications by reducing the amount of transmitted data at a reduced computational cost.