Lossy compression is a compression method that reduces some of the information in order to make audio files smaller. MP3, AAC, and Opus are typical examples. The original PCM data cannot be fully restored, but the format suits sharing, previewing, communication, and streaming.
What makes it lossy
Information removed during compression does not come back, even if you convert the file to WAV for playback. This does not mean the file is damaged; it is a mechanism for balancing file size against how the audio sounds.
Where MP3, AAC, and Opus stand
MP3, AAC, and Opus are all lossy codecs, but they differ in supported environments, the containers they use, and what they are good for. MP3 offers broad compatibility, AAC is used in containers such as M4A, and Opus is an option for the web and for communication. Rather than asking which is always higher quality, put the specifications of your delivery target and playback destination first.
The relationship with bitrate
In lossy compression, the bitrate is a guide to how much data can be used per second. Raising it increases the file size, but the number alone does not determine the result. The original source, the channel count, the encoder, and whether you use variable or constant bitrate all have an effect. Listen to the converted file before you publish.
Avoid repeated conversion
Converting MP3 to AAC and that AAC to another MP3 can lose information each time. Converting an MP3 to WAV in the hope of improving the quality will not bring back what was lost. Keep the WAV or AIFF you use as your production reference and create whatever format you need from that in a single step.
Choosing by purpose
Use PCM WAV for delivery and further editing, MP3 or AAC for size-conscious sharing, and FLAC for storage that preserves the sound. If your publishing destination re-encodes, follow its recommended specifications. When you make sharing files from a WAV, you can use the audio format converter tool.
