I don't know what these things are called exactly in the Linux world.
But there is the concept of a drive in RAM, to write files onto and read them like it was any disk drive. There is also the concept of an intrinsically compressed drive.
(Effective) compression takes time, of course. So I also wonder if there is such a thing to pre-compress a file externally to the system that has the compressed drive, and move it, e.g. coming from a network connection, onto the RAM drive without it taking time to compress. (Though I guess that compressed drives favor speed over level of compression, to be feasible at all?)
For the curious (and maybe because someone might tell me that I should ask a different question as this scenario drawn here is not a good way to do what I want):
The aim of this is: I have a machine with very limited storage (eMMC), and it is supposed to write a trimmed-down Linux image onto another machine it is connected to, and there is already a readily available program, geared towards doing that to the even smaller target machine. That program takes a typical image file.
I cannot hold the image on the storage of the "pushing" machine. But what if I made a RAM drive and kept a compressed Linux image in it, loaded from external connection for this event, and pointed the mentioned available flashing program to that file. The Linux image would not fit, uncompressed, in the RAM - but compressed, it probably will, at least with usual zip settings, which are, I guess, better than a drive for "live" stuff.
I could write a modified flasher program and do decompression myself. But if the same thing actually was only a few standard Linux commands away from working, why do it myself. (And also, learning new things that Linux can do, if it can do them, is always good.)