In film photography photos are recorded onto light sensitive film. This is developed with special chemicals and a negative is produced. In digital photography photos are stored as a digital file. You need to decode the file in order to view it. There are different types of file formats used in digital photography. Some are lossy and some are lossless. The most common lossy file format used in digital photography is JPEG. The most common lossless file format used is TIFF. Increasingly becoming common are lossless RAW files.
Glossary of Digital Photography Terminology – http://www.digital-photography-tips.net