What Base64 encoding does
Base64 rewrites binary data using 64 printable characters, so an image can travel through channels that only accept text — a JSON payload, an HTML attribute, a YAML file or a text column in a database. Nothing is compressed or lost; the encoding is fully reversible.
The size trade-off
Base64 makes data roughly 33% larger, because three bytes become four characters. That is acceptable for small assets and wasteful for large ones. Encoding tiny icons directly into a stylesheet removes a network request, which can be a net win; encoding a 2 MB photograph into a page is almost always a mistake.
Base64 string or data URI?
This tool gives you the raw Base64 payload. If you want a value you can drop straight into an src attribute or a CSS url(), use the Image to Data URI converter instead, which adds the data: prefix and MIME type.