8 bit vs 24 bit Color Example

You should be able to see that the left side image makes a smooth transition between shades of each color from left to right (lighter to darker) while the right side image has vertical lines where there are noticeable color differences between colors from left to right. This is because the original 24 bit color uses 766 colors which in the 8 bit image need to be reduced to 256 colors.

Note that both images have horizontal lines in them. This is not a mistake or an artifact. The way this image is built is that it shows every pure blue, green, and red shade with a box. The lightest blue shade is shown in the upper left and then the shades get slowly darker from left to right until the end of the row, where it wraps to the start of the next row.

24 bit color PNG File 8 bit color Gif File