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Do I understand correctly, that kiwiclient (and also the web interface) is using LZ77 for audio stream compression?
So it is lossless compression?
No, ADPCM. Computationally inexpensive but lossy. I have no idea what the computational or latency issues of LZ77 would be.
And of course kiwirecorder has an option to disable audio compression. Same effect as the comp button on the audio tab of the web interface.