H.264, also called AVC, is the video compression standard behind most security camera streams. It reduces bitrate far below uncompressed video while keeping detail, and it is decoded in hardware by nearly every recorder, browser and phone, which is why it remains the safest default choice.
Every stream a recorder stores is compressed, and the codec sets the trade between picture quality, storage and processing load. H.264 is the widest-supported option specified on new cameras.
How H.264 compresses a stream
The encoder stores occasional full frames and then describes the changes between them, spending bits where motion and detail are visible and almost nothing on a static wall.
What profile and level mean
A profile sets the feature set and a level caps resolution and bitrate. A recorder that decodes only Baseline or Main will struggle with a High profile stream.