This document describes methods and apparatuses for compressing digital image data using motion prediction. It involves performing motion prediction between consecutive frames by tracking motion on luminance maps and applying the motion prediction to chrominance maps. The wavelet coefficients and motion prediction information are then encoded into a bitstream based on a target transmission rate. The encoding satisfies a predetermined threshold according to a predetermined algorithm. The document provides details on various encoding and decoding steps, including wavelet transforms, context modeling, quantization, and motion estimation/compensation.