True-Color GIF Example

The mistaken belief that GIF has a limit of 256 colors probably comes from the way GIF was first used when it came out. In the late 1980’s, PC video cards generally supported no more than 256 colors. Image exchanges were becoming popular among BBS systems and the Internet and viewer programs were quickly produced. No one tried or needed to generate images with more than 256 colors since they could not be viewed on anything less than high priced graphics workstations. Programs that converted images to GIF worked up a number of methods to reduce the number of colors to 256 or fewer. Some actually did a very good job. GIF files were constructed with just a single image block, even though the GIF standard placed no limit on the number of blocks. Since there was no use for more than 256 colors, there was no use for more than one image block. This practice became effectively ingrained into the computer culture and eventually everyone “knew” that GIF supported no more than 256 colors. The fact is, the programs that generated GIF files supported no more than one image block, and thus didn’t have a means to deal with more than 256 colors. The top image shows that a GIF file really can have more than 256 colors.

(via http://phil.ipal.org/tc.html)