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Disclaimer: This article is for educational and preservation purposes. The author does not condone downloading copyrighted games you do not own. Always dump your own BIOS and discs from hardware you possess.
Originally developed for MAME (Multiple Arcade Machine Emulator) to compress hard drive and CD-ROM images, CHD is a lossless compression format. Unlike zipping a .bin file (which most emulators cannot read natively), the CHD format uses internal hunk-level compression to shrink disc images without losing a single byte of data.
If you have legal BIN/CUE or ISO files (from discs you own), use (part of MAME tools):
No audio quality or video data is sacrificed.