We have an ASCII bitmap format
It's defined as
(A-Z0-9) are the different characters for the pixel colours
 example image:
 GGGGGGGG
 HHHHHHHH
 HHHAAAHH
 HHHAAAHH
 AAAAAAAA
 ABCDEFGH
 
 AAAAAAAAAAAAAAAAAA
 BBBBBBBBBBBBBBBBBB
 CCCCCCCCCCCCCCCCCC
 DDDDDDDDDDDDDDDDDD
 EEEEEEEEEEEEEEEEEE
 FFFFFFFFFFFFFFFFFF
 GGGGGGGGGGGGGGGGGG

Our compression scheme is as follows (A-Z)(0-9) 
 AAAAAAAAAAAAAAAAAA
 BBBBBBBBBBBBBBBBBB
 CCCCCCCCCCCCCCCCCC
 DDDDDDDDDDDDDDDDDD
 EEEEEEEEEEEEEEEEEE
 FFFFFFFFFFFFFFFFFF
 GGGGGGGGGGGGGGGGGG

becomes

 A9A9
 B9B9
 C9C9
 E9E9
 D9D9
 E9E9
 F9F9

If the characters A0 appear it means that the next group of characters are not compressed until A0 or a newline is met again

  A9A0AAAAAAAAA
  A0BBBBBBBBBA0B9

So part 1 is interpret our bitmaps * we have to make some bitmaps and a viewer! *

Part 2 is compress our bitmaps (they don't have to look the same)
Part 2.5 is who compresses the smallest
Part 3 - instead of Part 2 make a bitmap editor
Part 3.5 is who made the best one