Optical zoom provides the best image quality.
TWO KINDS OF ZOOM
Many digital cameras have either optical zoom lens capability or digital zoom capability, and some have both types. The difference between them is significant.
Optical zoom - zooming in using a longer lens setting - provides the best image quality, because the actual picture itself is being enlarged optically, by the lens.
Digital zooming is actually nothing more than an enlargement of the center part of the image after it has reached the maximum optical zoom setting. It is similar to cropping. It appears to be optically increasing the picture size, but the picture's resolution is as big as it is going to get.
Zooming in optically (middle picture) provides a nice, sharp image, but digital zooming (right) is like enlarging a small portion of the image after maximum optical zoom. The image's deterioration is caused by digitally enlarging the smaller image.
Digital zooming only enlarges the central area of the picture, which means that less pixels are used to record the scene, and therefore the image will be of lower quality.
You are probably better off to not use it for its suggested purpose -- as a cropping device -- since you can achieve the same effect under more-controlled and relaxed conditions when you are editing your downloaded pictures on your computer.
However, some photographers make good use of digital zoom. They say they use digital zoom to obtain detailed exposure readings of a small area of a scene, which they then use to calculate exposure using the camera's manual settings for aperture and shutter speed.
Being able to switch from a wide-angle lens to a telephoto lens allows you to maintain maximum image qualtiy while bringing your subject closer, as shown in the images of the same scene above.
When you cannot zoom closer to a subject using optical zoom, physically move your camera closer to achieve the image you want instead of using digital zoom. You will maintain image quality. Another option that may be available to you if your camera has the ability to accept interchangeable lenses is to switch to a longer focal length lens to bring you closer to your subject.
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