TO THE IEEE TRANSACTIONS ON IMAGE PROCESSING , MAY 1998 1 Capacity Estimates for Data Hiding in

| In this paper, we present an information-theoretic approach to obtain an estimate of the number of bits that can be hidden in still images, or, the capacity of the data-hiding channel. We show how the addition of the message signal or signature in a suitable transform domain rather than the spatial domain can signiicantly increase the channel capacity. Most of the state-of-the-art schemes developed thus far for data-hiding have embedded bits in some transform domain, as it has always been implicitly understood that a decomposition would help. Though most methods reported in literature use DCT or wavelet decomposition for data embedding, the choice of the transform is not obvious. We compare the achievable data-hiding capacities for diierent decompositions like DCT, DFT, Hadamard, and subband transforms and show that the magnitude DFT decomposition performs best among the ones compared.