Why does the InterWorx-CP backup system use .tar.gz files instead of .zip?

The backup files are .tar. Gz files (as opposed to . Zip files) because the .

Tar compression format preserves file permissions. This is necessary if you want the backup to work when it is restored. Tar is a packaging format, not really a compression, so GZip (.gz) is used to shrink the file even further.

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