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Most of the responses so far have dealt with how compression works.
That's great and I have enjoyed reading the thread. I would like to
throw in my 2-cents about how it sounds and what my experience has been
as a reasonably competent audiophile.
(1) What is your ultimate goal? 3000 CDs in standard jewel cases would
form a single stack in the neighborhood of 100 feet high (or 10 stacks
each 10 feet, etc.) That's a lot of storage space. Is your goal to
compress these so you can sell the originals or throw them away? That
is, are you trying to reclaim space in your home?
If so, I can see why you would want to compress them without loss.
However, this is one thing I would not do. I would keep the originals,
but perhaps move them to the basement or other storage location rather
than keep them in my living room, or listening room, or whatever.
If that is done, then absolute lossless compression is not as necessary.
You still have the originals.