A Digital image is first and foremost a file, ready to be viewed in your computer or multimedia device. There are a lot of different types of digital images, but all of them have been designed to store data.
Digital images store values for what we call colors in a RGB format (Red, Green and Blue). RGB are the primary light colors allocated in channels. Certain types of images can allocate yet another channel called alpha channel. This alpha channel stores the values you decide to be transparent in the image.
In SL environment you can only upload *tga and *png images for a transparency effect or transparent area. This type of image stores colors in three channels, and also can store the transparency in the alpha channel.
Not too long ago, *tga was the only type with alpha enabled for SL. However, Portable Network Graphics format, or *png, works as well as *tga and it's easier to handle.
SL is flooded with transparency areas. Transparencies have a little drawback though: They collide. Not only in_world, but at any virtual environment. It's something the processor has to decide which goes first. That's why sometimes, your hair will be eaten up by a glass, or floor, or even a wall, given the fact that they have been textured with any image with transparency effect. Ctrl+T will give you an idea about this usage, turning into Red all transparencies.
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