what is squashfs?

squashfs is a heavy-compression based read-only filesystem that is capable of compressing
2 to 3GB of data onto a 700 MB file. Have you ever thought of how Linux Live CDs work?
When a Live CD is booted it loads a complete Linux environment. Linux Live CDs make use
of a read-only compressed filesystem called squashfs. It keeps the root filesystem on a
compressed filesystem file. It can be loopback mounted and files can be accessed. Thus when
some files are required by processes, they are decompressed and loaded onto the RAM and
used. Knowledge of squashfs can be useful when building a custom live OS or when required
to keep files heavily compressed and to access them without entirely extracting the files.
For extracting a large compressed file, it will take a long time. However, if a file is loopback
mounted, it will be very fast since the required portion of the compressed files are only
decompressed when the request for files appear. In regular decompression, all the data is
decompressed first.