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Put it this way ving, with a jpeg you have 8 bits of data to work with (256 shades of grey) with Raw (canon) you have 12 bits of data to work with 4096 shades of grey to work with. This gives much more abiltity to stretch you data to bring out hidden highlights and shadows.
Which is why astro CCD are 16 bit (65536 shades of grey from black 0 to white 65535), in each channel that is recorded (RGB)
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