I recently found out that XTerm supports sixels natively if started with the "-ti 340" option. For example gnuplot can make use of that feature using the command "set terminal sixlegd".
It turns out because of the way sixels are encoded (six vertical pixels in a row using bitplanes) it packs better than png when used in conjunction with the bzip2 packer. Every image can simply be encoded to sixel with imagemagick using "convert image.png sixel:- > image.six"
Personally I think sixels are genius should be used much more often.
Great news! I think we may finally see a resurgence. It will be well supported on mainstream Linux, and given that the web is getting so heavy-weight, this will offer a solid alternative for graphics that you can rely on. Libvte is very popular.
I took the reduced color depth into consideration. However on second glance it seems like Imagemagick does not compress PNG very efficiently with default settings. After recompressing with zopflipng PNG was easily able to beat bzip2 packed sixels. Results for 256 color 512x512 Lenna:
I used your ImageMagick command, but the resulting image is very bright and almost invisible. I tried disabling Unicode using +u8, but that didn't work. I tried mlterm, that worked.
That should be "sixelgd", of course. And there is the classic "dumb" terminal, that plots to any text terminal, optionally using ansi escape codes for color.
It turns out because of the way sixels are encoded (six vertical pixels in a row using bitplanes) it packs better than png when used in conjunction with the bzip2 packer. Every image can simply be encoded to sixel with imagemagick using "convert image.png sixel:- > image.six"
Personally I think sixels are genius should be used much more often.