Mp3 is the most popular and widespread audio format. It was created by MPEG team in the 90s of the last century. MP3 format provides the quality of sound reproduction, similar to the original sound. The MP3 format is based on a lossless compression algorithm made to reduce the data size. In other words, music streams are compressed and deleted in the format that are somehow similar for listening on devices of common use.
AAC or Advanced Audio Coding is an audio file format with losses. It was designed in 1997. as an MP3 successor with improved encoding quality. Its main advantage and difference from MP3 is a great efficiency of encoding at both constant and variable bitrates.