Method and system of differential compression

A method for differential compression includes receiving input data blocks that are selected for compression. For each input data block, the input data block is divided into at least two segments. For each of the at least two segments, a similarity degree between the respective segment and each of the data blocks excluding the respective data block is computed. For each of the at least two segments, the data block which has a biggest similarity degree with the respective segment among the data blocks excluding the respective data block is selected as an optimal reference data block for the respective segment. The differential compression is applied to the input data block and optimal reference blocks in response to determining a differential compression that is to be applied based on the similarity degree between the segments of the input data block and the corresponding optimal reference blocks.