A method and apparatus is disclosed for digitally compressing video signals. The method and apparatus provides a system which generates values related to the differences between respective pixel locations and an x,y pixel display. The differences generated between proximate pixel locations are used to generate various delta values which are encoded in an asymmetric fashion. The asymmetric coding eliminates artifacts in the displayed image, and the delta encoding is performed in both a horizontal and vertical direction (otherwise known as Two-Dimensional Delta Encoding) and this operation tends to randomly distribute error in the compression process across the visual image so as to approximate noise or grain generally perceived by the viewer in an analog display.