An improved system and method for performing lossless data compression of a data string by parsing the data string and representing the parsed characters of the data string as irreducible grammar that is efficiently updatable. The system and method are each capable of parsing the data string into a least one variable of irreducible grammar, such that each variable represents a respective plurality of data characters of the data string, and formatting each variable of irreducible grammar as a linked list data structure having at least one pointer pointing to a linked list data structure representing another variable. The system and method are each further capable of updating the irreducible grammar based on at least one character to be parsed in the input string by changing at least one pointer of at least one of the linked list data structures to point to a linked list data structure different than that to which the at least one pointer pointed prior to updating. The system and method is further capable of encoding the irreducible grammar into a string of bits. Also, the system and method can employ a separate parse module, grammar transform module, and arithmetic coder module to perform the parsing, linked list formatting, and encoding operations, respectively.
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